+++ ALWAYS UP TO DATE WEEK 14 +++

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 and China's zero Covid strategy are impacting supply chains and operations worldwide. Last week, the Shanghai metropolitan region was widely sealed off as part of a lockdown due to Covid-19 outbreaks. This measure is having a noticeable impact on Air and Ocean Freight to and from China. 

Increased energy costs also remain a factor for the entire industry. In concrete terms, this also leads to cost surcharges at SENATOR. For detailed and product-related questions, please contact your personal SENATOR contact person directly.

AIR FREIGHT 

Fuel prices are rising again. This leads to surcharges and higher costs in the market. At the moment it is not possible to calculate when a decrease can be expected. Furthermore, cautious planning should be made and developments should be closely monitored. The war in Ukraine, the closure of Russian airspace and the consequences of lockdowns in China are massively disrupting supply chains worldwide. Short-term ad hoc bookings are hardly accepted by the market. Worldwide, capacity utilization remains extremely high. 

On the "SAB" SENATOR Atlantic Bridge, routine maintenance work is being carried out on deployed freighters on a weekly basis. This may result in capacity bottlenecks. SENATOR is working on flexible solutions throughout.

A new aircraft type will be deployed on the "SAB" service to Mexico starting this week. From now on, A330 freighters will take off 3 times a week from Frankfurt (FRA) to Mexico City (MEX). This improves the service with more capacity.

OCEAN FREIGHT  

The situation has eased somewhat for exports from Europe to Asia. The reason: bulk goods such as wood are hardly being transported at present. As a result, rates are falling. In the direction of India and the Middle East, on the other hand, there are hardly any vacancies. Handling at the port of Colombo, Sri Lanka, continues to be delayed. In the direction of Australia/New Zealand, ships continue to be fully booked, especially on direct services. Accordingly, rates remain at a high level.

Covid-related lockdowns in China, especially in Shanghai, are noticeably delaying operations. Currently, all ships to Asia are delayed by up to 17 days. Many carriers are trying to compensate for this by skipping certain port calls in the short term. First carriers (like Cosco or MSC) have announced ship cancellations (Blank Sailings). Currently, more than 300 ships are waiting off Shanghai for a berth and clearance.

As a result of the Ukraine war, all bookings to Ukraine, Russia and Belarus have been suspended. This will further congest European transshipment hubs. Cargo scheduled for the affected region is not being loaded, leading to exacerbated shortages of empty containers.

For imports from Asia to Europe, the Shanghai lockdown is also having an impact. In general, however, the situation towards Europe has eased somewhat. Rates remain stable. Free slots are available. Short-term bookings are also more possible than in the first quarter. Currently, shipping companies are struggling with rising bunker prices on a daily basis. In the medium term, this could also have an impact on rates overall.

Demand remains high for exports from Europe to North America and Mexico. The two California ports of Los Angeles and Long Beach continue to see record import volumes. This continues to cause congestion and delays. Bright spot: The number of ships at anchor at least dropped to 45 last week. Demand for Canada is also high. In Vancouver, services are delayed due to congestion on the US West Coast. To Mexico, vessels are currently at full capacity. Short-term vessel space without appropriate allocation is not available.

RAIL FREIGHT

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

CURRENT SITUATION WORLDWIDE

BRAZIL

Capacity for Air Freight remains tight despite the return of passenger flights. Especially for larger volumes, inquiries should be made early. SENATOR will then check availability. This is especially true for flights to and from the LATAM neighboring region. The two airports Guarulhos (GRU) and Viracopos (VCP) in São Paulo remain congested. The result: bottlenecks and long waiting times.

For Ocean Freight, the situation has recovered somewhat for traffic to LATAM and the USA. To and from Europe, free slots are still scarce. This also keeps rates at a high level.

CHINA

The Shanghai lockdown is upsetting supply chains with China. Costs are being driven up and schedules cannot be met in many cases. For Ocean Freight, there are delays in clearance. According to industry observers, many players are switching to Ningbo. This is an attempt to bypass the bottleneck of Shanghai (source: theloadstar.com).

The lockdown continues to put pressure on China's entire economy. The latest measures are the largest imposed since Covid-19 broke out. Greater Shanghai is both an important location for the financial industry and a center for semiconductor, electronics, and automotive production. The loss of business is said to be already enormous and is fueling calls, not only in the Western world, to question the strict zero covid strategy (source: bbc.com).

Frustration is also growing among the population. Since Friday, the western part of the Shanghai metropolis has also been in strict lockdown. People have to stay in their homes and depend on the government for food supplies. In recent days, supply shortages have been reported from some parts of the city (source: tagesschau.de).

MEXICO

Regular fares for commercial flights are hard to find for Air Freight. The high utilization keeps the prices high. SENATOR offers a reliable alternative to Mexico City (MEX) with the "SAB" SENATOR Atlantic Bridge. 

For Ocean Freight, there is a lack of equipment on many routes. Rates continue to rise and reliable adherence to schedules cannot be guaranteed. This also applies to exports to Europe. In transpacific traffic from China, the lockdown in Shanghai is also having an impact. Delays are occurring. Rates remain at a high level.

SOUTH AFRICA

To counter the burden of increased fuel prices, the government has adopted an ad hoc scheme for April and May. The tax on fuel levy will initially be reduced by ZAR 1.50 per liter. 

The covid situation in the country remains relatively relaxed. Regulations have been relaxed recently. The mask requirement has been lifted. Large events can take place again. Currently, there are fewer than 900 new infections per day. At the same time, the government is pointing to a possible 5th wave starting in the fall in May. 

In general, the lockdown situation in China for Air and Ocean Freight entails a shortage of equipment and capacity bottlenecks on the supply chain from China to South Africa. The rising fuel costs also have consequences for SENATOR. In line with industry standards, all rates were revised as of April 1. This brings SENATOR in line with the annual rate changes of the state port authority Portnet.  

USA 

The US Senate approved a reform of the Shipping Act. The background to the change in the law is a complaint from shippers regarding price developments on the part of shipping companies. US companies had been disproportionately burdened in this respect because transport prices on the route between Asia and the United States had been raised the most. 

Major shipping companies have expressed their reservations about the amendment. According to their own statements, the shipping companies would be held responsible for problems in the supply chain that were not caused by them (source: theloadstar.com).
 

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