+++ ALWAYS UP TO DATE WEEK 18 +++

Regular information on current developments

What is currently shaping the market for air freight? What for ocean freight? What's happening on the rail link with China? You can read interesting facts here.

GENERAL INFORMATION  

The war in Ukraine and the continuing consequences of the strict lockdowns in China continue to shape the global market situation. In this issue, we take a closer look at the accompanying effects for Ocean Freight in particular.

For SENATOR, too, the current challenges are leading to cost increases. As before, please do not hesitate to contact your personal SENATOR contact for detailed and product-related questions.

AIR FREIGHT 

Fuel prices continue to climb and are at an even higher level than recently. Another factor is that some airports are experiencing increased shortages of jet fuel. South Africa is one of the countries affected. This has not yet had any drastic consequences. Should the situation worsen, there could be an impact on loading capacity on such routes. 

The situation for exports and imports to and from China remains tense. The market is still experiencing a backlog following the prolonged lockdown in Shanghai. Initial trends are pointing in a positive direction. How long it will take for the situation to normalize remains to be seen.

On the "SAB" SENATOR Atlantic Bridge in the direction of the USA, 4 additional weekly flights to Greenville-Spartanburg (GSP) will operate in May. These extra connections should give some breathing space to the recently tense situation. The same applies to Mexico. Also in May, three A330-F cargo planes will fly weekly from Frankfurt (FRA) to Mexico City (MEX).

In general, airfreight capacity from Northeast Asia to Europe has dropped significantly since the end of February. Long detours make the route uneconomical. Since the beginning of the Russian attack on Ukraine and the sanctions imposed as a result, capacity on these routes has dropped by 22% compared to the same period last year. This is shown by the latest figures from Accenture's Seabury Consulting (source: aircargonews.net).

OCEAN FREIGHT

Congestion off virtually all major container ports, lockdowns in China, lack of empty containers on key routes - the situation for ocean freight remains very tight. This is resulting in a significant drop in schedule reliability. Important to know: freely accessible data, for example via the websites of shipping companies (such as Maersk, MSC, Hapag Lloyd, etc.) are currently no longer completely valid. Schedule deviations are only insufficiently published.

Normally, shipping companies have a service reliability of over 90%. Recently, this was below 30% for many providers. The Shanghai lockdown in particular has had a severe impact on the ability to plan. Currently, up to 400 ships are waiting for clearance in front of the port there. The entire schedules have been disrupted by shifts in the supply chains. It will take a long time for the carriers' data systems to provide reliable results again. For now, rates are softening somewhat and many carriers are responding by consolidating cargoes or canceling sailings ("blank sailings"). Some sources believe that many of the container ships are simply waiting for new orders outside the port of Shanghai. Fleet managers would have difficulty coordinating contingency plans with alliance partners (source: theloadstar.com).

In general, current data from shipowners regarding vessel departures and arrivals should be viewed with caution. Planning ahead and being flexible for all shipments is key.

For exports from Europe to Asia, little has changed. The lockdown in Shanghai is affecting schedule reliability, as already stated. Added to this are now delays in the Beijing region. For the Port of Hamburg, many ships are currently jammed in the German Bight off Helgoland. For imports from Asia to Europe, the lockdowns and the resulting delays also determine the picture. Rates are currently dropping slightly.

For exports from Europe to North America and Mexico, the congestion off the US ports remains a key braking factor. While the situation off Los Angeles and Long Beach has improved somewhat, the high number of diverted ships off the US East Coast is leading to increased congestion. Many ships are booked up to 6 weeks in advance. Rates remain at high levels. In Europe, empty containers continue to be in short supply. There is currently no relief in sight. Significant delays are also reported from Europe to Mexico. The situation requires accurate and forward planning for both FCL and LCL.

RAIL FREIGHT

As a result of the war situation in Ukraine, our SARB (SENATOR Asia Rail Bridge) service has been temporarily suspended. No bookings are being accepted at this time. We ask for your understanding and will keep you informed about further developments regarding rail freight.

An alternative to the slow, often enough less reliable ocean vessel and to the expensive airplane is called SEA-AIR. The route from Asia by sea freight to the Middle East - mainly via Dubai - and on to Western Europe by air is experiencing a new upswing. Faster than sea freight, cheaper than air freight. A good solution in between.

CURRENT SITUATION WORLDWIDE

BRAZIL

Comparatively little has changed for air cargo: High demand and few free seats. Congestion continues at Guarulhos (GRU) and Viracopos (VCP) airports in São Paul.

For ocean freight, delays are to be expected, especially to and from Asia, due to the lockdown situation.

CHINA

China's transportation crisis is widening due to public holidays in the Middle Kingdom and lockdowns in more major cities. The Chinese export and logistics market is thus coming under even more pressure. Despite the opening of some districts of Shanghai, the situation in most of the region remains critical. Barriers and strict controls continue to slow down supply chains there (source: theloadstar.com).

Air cargo is also feeling the effects of the widespread Shanghai region lockdown. At Shanghai PVG Airport, air cargo capacity fell by one-third in April compared to the same month last year. The latest statistics from Seabury Consulting show a decline of 66.4% (source: aircargonews.net). 

Meanwhile, another lockdown is brewing for the Beijing region. Here, too, airfreight is already feeling the possible effects. Since April 27, all air cargo arriving in Beijing must enter a 10-day quarantine. Specifically, shipments are held at the consignee's premises and disinfected multiple times before they are allowed to be delivered, installed or further processed. 

MEXICO

For airfreight, the "SAB" service with 3 connections per week from Frankfurt (FRA) to Mexico City (MEX) relieves the capacity bottlenecks. To and from Asia, the situation is complex. By changing the departure airports, flexible solutions can be created here if necessary.

For ocean freight, the capacity situation remains complex. Free slots are scarce, and there is a shortage of empty containers here and there. The lockdown in Shanghai and other Chinese metropolises is also affecting transfers to and from Central America. Forward planning is the top priority.

SOUTH AFRICA

At the moment, a fifth Corona wave seems to be emerging. The number of new infections rose to 4,000 cases per day last week. The government has taken new measures to get the situation back under control as quickly as possible. 

After the devastating floods in the province of KwaZulu-Natal, cleanup efforts are in full swing. It is estimated that the financial damage to infrastructure could be as high as 17 billion rand (more than $1 billion).

As a consequence of the floods, fuel supplies in the country have also been disrupted to some extent. Some airlines are reacting to this by canceling flights to Johannesburg. ACSA, the Airports Company South Africa, confirmed a shortage of jet fuel. Nevertheless, the situation remains under control.

USA 

Following a judge's ruling to this effect, masks are no longer mandatory on board aircraft in the USA. The National Institutes of Health (CDC) had exceeded its legal authority with the regulation, according to the reasoning. The FAA subsequently announced that it would no longer require the wearing of masks with immediate effect (source: aerotelegraph.com).

The U.S. truck market is facing one of the worst slumps in recent years this summer. China's strict lockdowns and the resulting impact on supply chains are having a huge effect on major U.S. container ports - and the trucking companies that serve them. According to a calculation by FreightWaves, nearly half of all containers imported into the United States originate in China (source: freightwaves.com). 

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