+++ ALWAYS UP TO DATE WEEK 50 +++

Regular information about developments worldwide

What is currently shaping the market for air freight? What for sea freight? What on the rail connection with China? You can read interesting facts here.

AIR FREIGHT

The capacity bottlenecks on most routes have hardly changed. Demand is very high just before Christmas. As a result, the situation tends to worsen on some routes. In order to work off the backlog of cargo bound for the USA, SENATOR is adding 2 extra flights to Greenville-Spartanburg (GSP) to its "SAB" SENATOR Atlantic Bridge this week. On this route, most of the backlog should be cleared after the holidays.

For routes to and from China, the situation has become more complicated. Concerned about the new Corona variant Omikron, China has in some cases enormously restricted takeoff and landing rights for aircraft from Europe. This is having a noticeable impact on supply chains. A renewed increase in mask and test kit shipments from China to Europe is exacerbating bottlenecks for imports from Asia.

By contrast, the situation for South Africa has eased somewhat. The "SAB" SENATOR Africa Bridge operates regularly at its normal frequency with 2 flights per week from Frankfurt (FRA) to Johannesburg (JNB). 

OCEAN FREIGHT   

Looking ahead to the coming year, there is uncertainty in the industry. Container spot rates are expected to rise sharply in January. Especially ahead of the Chinese New Year around Feb. 3, 2022. According to industry media The Loadstar, budgets for the coming year are subject to considerable uncertainty among many players in the market (source: theloadstar.com).

From December 15th or later, dockworkers' unions in India may be planning an indefinite nationwide strike. The demands revolve in particular around the new Ports Act and the accompanying transformation of state-owned ports into independent companies. A strike could have serious repercussions for port activities in India and result in delays (source: FSL Alert / Freight Systems India Newsletter). As yet, announcements remain the order of the day.

Little has changed recently on the major routes. For exports from Europe to Asia, China remains a drag on supply chains due to its zero covid strategy. In general, rates are at a high level and free slots are scarce. 

The same is true for imports from Asia to Europe. Congestion at many ports in Northern and Central Europe caused alliances to omit certain ship calls in the second half of 2021. In total, these amounted to 383 calls from the Far East to Europe in the past five months, according to Alphaliner, representing nearly a quarter of all scheduled calls. In this way, the shipping companies tried to avoid or make up for delays and restore the reliability of the schedules (source: Alphaliner Newsletter 49/2021).

For exports from Europe to North America, Mexico and South America the picture is the same as recently: High rates, full ships, waiting times in front of many ports. The latter continues to apply in particular to the US West Coast. A shortage of trucks and chassis also continues to cause delays in the US hinterland traffic.

Container shipping company ONE has announced a new postponement of the Port of Los Angeles/Long Beach Authority's imposition of an emergency import container fee. After the additional fee was announced, the number of containers stored at the terminal dropped by nearly 30%. Apparently, the planned measure is prompting many companies to pick up their waiting containers more quickly.

RAIL FREIGHT  

China will continue to support the New Silk Road with subsidies until 2023. The reason for the Chinese government's decision is the ongoing Corona crisis. The general consensus in the industry: in the long term, there would no longer be any need for government support. This was confirmed by many industry representatives. Transportation volumes are high and prices are competitive, they said. If at all, further aid might be appropriate for exports from Europe to China (source: railfreight.com).

CURRENT SITUATION WORLDWIDE

BRAZIL 

For air freight, rates remain at a high level due to continued strong demand. For export to Europe, planning should be done as far in advance as possible. The two airports Guarulhos (GRU) and Viracopos (VCP) in São Paulo continue to be congested. Longer waiting times should still be taken into account here.

For ocean freight, prices for imports from Asia are constantly fluctuating. This makes reliable planning more difficult. For exports to the USA, noticeable delays have to be taken into account due to congestion at many ports as well as equipment and personnel shortages in hinterland traffic. In general, exports from Brazil are subject to full ships and hardly any available containers.  

CHINA

China has imposed stricter regulations for passenger aircraft with cargo option (PAX). COVID-relevant goods such as masks or tests may still be loaded in cabins. For other goods, each shipment will be reviewed on a case-by-case basis. This significantly complicates the current import situation for air cargo.

At last week's central economic conference, China's government emphasized boosting demand through targeted political support. For example, the regulation of large private companies is to be relaxed. This is the Beijing government's response to the current "triple whammy" of falling demand, supply shock and weaker expectations than previously predicted. The Chinese economy should receive a lot of "stability," it said (source: scmp.com).

MEXICO  

For air freight, the prices of imports from Asia continue to rise. Free seats are rare. Bookings should be made up to 2 weeks in advance. For import from Europe to Mexico, the "SAB" SENATOR Atlantic Bridge to Mexico City (MEX) continues to offer stable option.

For ocean freight from Asia to Mexico, prices remain at high levels. From Europe to Mexico, SENATOR offers sufficient capacity with competitive rates both FCL and LCL, especially for the automotive industry. For export to the LATAM region, the situation remains complex: free slots and available equipment are scarce.

SOUTH AFRICA

The number of Corona infections has jumped in recent weeks due to the new Omikron variant. This would indicate a more rapid spread of the variant. South Africa is thus officially in the feared fourth wave. The government is now trying to vaccinate the previously unvaccinated part of the population as quickly as possible. So far, around 26 million people are considered to be fully vaccinated.

The situation for road freight traffic to and from South Africa has eased at most border crossings. Prolonged traffic jams are the exception rather than the rule. A traffic jam at the Beitbridge border station last week was caused by an IT problem. Here, too, the route is now no longer congested.

For ocean freight, the low availability of containers is a concern for many stakeholders. This is according to a survey conducted by the Hamburg-based container service "Container xChange". In addition to equipment shortages, market participants are concerned about rate surcharges, high tariffs in general and a Corona-related decline in efficiency and punctuality.

USA   

For air freight, the dispute between U.S. cargo carrier 21 Air and the national pilots' union is entering its next round. The impetus for the debate is the relationship with Canadian airline Cargojet. The airline had requested earlier this year to increase its fleet limit from 5 to 10 aircraft. The U.S. Department of Transportation confirmed this. Critics accuse Cargojet of so-called cabotage (providing domestic transportation services through a foreign company). 21 Air is owned by Avia Acquisitions. The latter holds a 25% stake in Cargojet (source: aircargonews.net).

For ocean freight, U.S. ports remain congested. The Port of Savannah, Georgia, set a new monthly throughput record in November with more than 495,000 TEUs (Twenty-Foot Equivalent Unit). The volume represents a 6.7% increase over the same month last year. The increase comes at the right time: the Georgia Ports Authority (GPA) is seeking to increase the port's annual capacity by 25%. This is to cope with the enormous import volume (source: freightwaves.com).

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