What is currently shaping the air freight market? What about ocean freight? What about the rail connection with China? Read more.
Every year again... Imports from China are running at full speed: Peak Season. This year even fuller than usual. Capacity is extremely scarce, utilization is high. Rates are at record levels and are only valid for a short time - difficult to calculate. The situation is expected to continue until Chinese New Year (February 12th, 2021).
There are News on the "SAB" SENATOR Atlantic Bridge. On June 28th, 2020, the service took off for the first time to Chicago Rockford International Airport (RFD). The first months were a success. High demand drives the export to USA. Capacity is in demand. RFD Airport announced a new milestone: The airport officially becomes the HUB for SENATOR INTERNATIONAL. With this move, the entire Midwest of the USA gains increased access to airfreight capacity. A contract between SENATOR INTERNATIONAL and Emery Air secures the supply chain. As a leading airline based in RFD, Emery Air is responsible for ground and cargo handling on the ground.
At the same time, construction work has begun on a new 8,400 square meter cargo building - the beginning of a two-stage expansion to a total area of 18,600 square meters. The opening of the modern cargo facility is planned for summer 2021.
Imports from Asia? All full, as the shipping companies announce. The situation is extremely tense. But once again everything is connected with everything else. High demand Trans Pacific is driving rates there to the highest level. A lot of equipment is being shipped to China - for North America. The journey to Europe suffers from this. Empty containers: scarce goods. Ship space: overbooked. Record rates and surcharges keep the market on tenterhooks. Every shipowner name their price surcharges differently: Peak Season Surcharge, Equipment Imbalance Surcharge, Rate Recovery Surcharge... However you look at it: If you want to get on board, you have to plan early or swallow big markups. But even with that, there is no guarantee that everything will run smoothly at the moment.
Because of the increasing disparity between supply and demand, equipment availability and available cargo space, SENATOR INTERNATIONAL is introducing a Rate Recovery Surcharge (RRS) for ocean freight from Asia to Europe with effect from November 16th,2020 (Bill of Lading date).
The RRS will help to maintain flexibility and a high level of service. The RRS ensures uniform and simple calculation for transparent cost control. It is neither a premium surcharge nor a shipping guarantee. The surcharge will be implemented in line with market developments in order to continue to ensure the best possible agility and flexibility.
Delays continue to occur on the rail link from China to Europe. Several border crossings are currently reporting backlogs. At present, the border between Poland and Belarus is particularly affected.
SENATOR Asia Rail Bridge is still offering some exclusive booking capacities for the end of November on the route from China to Germany (Westbound). Departure possibilities and costs will be checked upon request. In the opposite direction from Europe to China (eastbound) the situation is still relaxed. Here it is also possible to book at short notice. Space and equipment are available.
CURRENT SITUATION WORLDWIDE
In general, the rates for all imports from China to Europe are at an extremely high level. The situation is expected to remain challenging until February 2021.
On the SENATOR Asia Truck Bridge the first shipments have successfully arrived in Germany. The service is particularly suitable for the transport of hazardous goods (e.g. lithium-ion batteries) as a fast and effective alternative to ocean freight.
After the election victory of the Democrat Joe Biden as the new US President, it is expected that China will probably try to negotiate a new trade agreement with Washington. Observers in Beijing are assuming this. US trade experts are more skeptical. They suspect that Biden will not take any steps that could be interpreted as giving in to Chinese demands (source: South China Morning Post).
The latest statistics show that in 2020, air freight volumes will be about 92% higher than in the previous year, despite the corona crisis. In contrast, passenger traffic (PAX) lost almost 90% in the same period. Many airlines are reacting and announcing further capacity cuts in passenger flights. This also has an impact on the freight market. After all, a lot of airfreight normally flies in the PAX belly.
For ocean freight, the ports of New Jersey/New York, Savannah, Jacksonville and Boston are currently congested. Far ahead planning is also advisable here.
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