+++ ALWAYS UP TO DATE WEEK 12 +++

Regular information about current developments

What is currently shaping the market for Air Freight? What for Ocean Freight? What on the Rail connection with China? You can read interesting facts here.

GENERAL INFORMATION 

The war in Ukraine is having far-reaching consequences for trade routes and supply chains worldwide. Figures for Ocean Freight bear this out. For example, maritime trade with Russia has declined by 58% so far since the start of the invasion (source: splash247.com). For Air Freight, the already Covid-related shortage of capacity is further exacerbated by the closure of airspace.

Increased fuel costs continue to lead to surcharges on modes of transportation. This also affects SENATOR. For detailed and product-related questions, please contact your personal SENATOR contact person directly.

AIR FREIGHT 

The development of fuel prices is keeping the entire market in suspense. In the past few days, a few major carriers have slightly reduced their most recently levied surcharges. In general, there is still a great deal of uncertainty regarding price developments. Reliable forecasts are hardly possible. For the time being, cautious planning is advisable and developments should be monitored closely. 

With the time changeover to daylight saving time, the summer flight schedule will take effect for airlines from Sunday. The flight schedule change is normally accompanied by increased capacity availability. To what extent the current Covid situation will allow this relaxation remains to be seen. At least in the westbound direction, an increasing number of passenger flights with cargo option (PAX) could well provide more available capacity. 

On the "SAB" SENATOR Atlantic Bridge, reduced frequencies may continue to cause capacity constraints. The background to this is routine maintenance work on cargo aircraft in service. SENATOR is working on solutions to compensate for any flight cancellations.

Ground handling at Frankfurt International Airport (FRA) is running normally for the most part. Currently, SENATOR is finalizing the last changes for 1:1 referencing in customs clearance for imports. The test phase of the new process handling should thus be successfully completed shortly.

OCEAN FREIGHT

The Ukraine war and new covid outbreaks in China dominate operations. Faced with falling spot rates, many shipping companies are canceling planned sailings and planning further surcharges. Last week, China's technology and financial hub Shenzhen had to be sealed off due to Covid. The port of Yantian continues to operate normally. Nevertheless, the lockdown is causing schedule changes and delayed processing in local port operations. In parallel, observers forecast lower demand to Northern Europe in the coming weeks. This is causing many shipping companies to run empty or cancel sailings (source: theloadstar.com).

For exports from Europe to Asia, the Shenzhen lockdown is causing ship cancellations and delays. Later this week, it will become clear for how long the short-term lockdown will be felt. Due to the Ukraine war, containers are jammed at many major ports. This is causing delays in operations. Among others, the port of Piraeus (Greece) reports 18 ships at anchor. There will be delays here in the medium term. Piraeus is one of the most important transhipment ports in the Mediterranean. 

For imports from Asia to Europe, rates are currently easing somewhat in some cases. The space situation also seems to be easing for some shipowners. However, the Ukraine war and China's zero-covid strategy with new lockdowns possible at any time make a reliable forecast difficult.

For exports from Europe to North America and Mexico, the situation remains unchanged: High demand meets few vacancies. A major problem at the moment is the availability of empty containers. This also affects many ports. Background: Containers originally loaded for Russia are standing at terminals and are not being moved. As a result, the rest of the market lacks sufficient empty containers in the short term. 

RAIL FREIGHT

Please note that as a consequence of the war situation in Ukraine our service SARB (SENATOR Asia Rail Bridge) is temporarily suspended. No more bookings will be accepted at this time. We ask for your understanding and will keep you informed about further developments regarding rail freight.

DEVELOPMENTS WORLDWIDE

BRAZIL 

For Air Freight, the space situation is somewhat more flexible than recently. This is particularly true for flights to the USA and the neighboring LATAM region. The two airports Guarulhos (GRU) and Viracopos (VCP) in São Paulo continue to be congested for exports. SENATOR is working with local shippers to ensure reliable planning for all pick-ups. This should reduce the risk of delays.

For Ocean Freight, demand towards Europe and South Africa remains high. Accordingly, there are few available slots. All bookings should be requested 6 weeks in advance. On the routes to Asia the situation looks better: free places and reliable rates. For import from USA the situation is relaxed. Bookings are also possible from Asia. For imports from Europe, the ships are still fully booked. This means: few free capacities and high rates.

CHINA

China's zero covid policy is having an increasingly significant impact on the domestic economy. Local governments are facing a growing financial burden. Currently, the country is in the biggest covid wave in two years (source: scmp.com).

Global supply chains are also clearly feeling the impact of the zero covid strategy. Disruptions in China often have a timely impact on global production capacity. Last week's lockdown in the Shenzhen technology center could result in medium-term supply shortages due to a short-term halt in production for many items. The number of ships waiting outside the port of Yantian rose 28.5% during the week, he said. Last week, President Xi Jinping said the country would stick to its current covid policy. At the same time, he stressed that measures to combat the pandemic should not bring economic disadvantages (source: bbc.com).

MEXICO

For Air Freight, rates are at a high level. This is especially true for imports from Europe. Regular rates for commercial flights are hard to come by. SENATOR offers with the "SAB" SENATOR Atlantic Bridge a reliable option with flights from Frankfurt (FRA) to Mexico City (MEX). 

For Ocean Freight, there is a lack of available containers on almost all routes to and from Mexico. Rates are currently on the rise. Due to delays, schedules cannot be met in some cases. In exports to Europe, delays are also occurring in some cases due to long waiting times for loading. In imports from China, the lockdowns in ports there are impacting the rate situation. Here, too, delays and ship failures lead to an increase in rates.

SOUTH AFRICA 

Fuel prices in South Africa are rising significantly as a result of the Ukraine war. Experts expect diesel prices to rise to 30 rand per liter. This would mean a price increase of 70% for the period from January 2021, a record level. 

Due to measures taken by the electricity provider Eskom, there is currently an increase in power outages throughout the country. Heavy rains and bad weather had recently damaged some parts of the power grid. How long the uncertain supply situation will last depends on the repair measures and weather conditions in the coming weeks.

From April 1, 2022, price increases by the state port authority Portnet will take effect. However, the Terminal Handling Charge (THC) will remain at the current level, according to the authority.

USA 

Amazon Air has rapidly expanded its air cargo operations in Europe over the past 6 months. The total fleet is expected to grow to 100 aircraft by the end of 2022. This is according to a report by the Chaddick Institute for Metropolitan Development. The most important locations for Amazon Air in Europe recently were Cologne-Bonn Airport and Paris CDG Airport (source: aircargonews.net).

With major container ports off the U.S. West Coast already suffering from congestion for nearly two years, traffic off East Coast ports is now also increasing dramatically. At the end of last week, 63 container ships were at times waiting off East and Gulf Coast ports. The cause is in particular a direct detour of more and more cargo ships from the Pacific Gateway Los Angeles-Long Beach to the East Coast. As a result, congestion off the East Coast ports is likely to worsen. Deployed capacity in the Asia-East trade is expected to reach 889,000 twenty-foot units in June 2022. This is 40% more than the average for the whole of 2021 (source: freightwaves.com).

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