+++ ALWAYS UP TO DATE WEEK 2 +++

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

At the beginning of the year, the global market situation is highly tense. The COVID variant Omikron is causing flight cancellations and staff shortages worldwide. To and from China, the charter situation has worsened again. Hundreds of passenger flights are being canceled. This has resulted in a significant drop in cargo options on passenger aircraft (PAX flights). China's zero-covid strategy and the resulting lockdowns are partially leading to a withdrawal of landing permits for airlines from Europe and the USA. For all bookings, the current flight status should be urgently checked in advance.

The self-controlled flights of our "SAB" are also affected. Staff shortages of pilots and other personnel lead to flight cancellations. Therefore, the current flight schedule cannot be adhered to. Especially on the "SAB" SENATOR Atlantic Bridge between Germany and the USA, several planned flights are cancelled. In the direction of Mexico, the COVID situation has not yet shown any concrete effects. However, this may change in the course of the week. 

In the direction of South Africa and Singapore, the picture is the same: So far, no effect has been felt. After the holidays, the situation is currently calm. No reliable forecast is yet possible for these routes either. 

The recovery planning of the flight program is ongoing. Lead times as well as rescheduling are constantly reviewed to ensure that supply chains remain stable. We will keep you informed about further developments.

OCEAN FREIGHT   

The situation remains as tense as before the turn of the year. For exports from Europe to Asia, China's strict measures on COVID outbreaks continue to cause delays. Lockdowns mean limited transport options. Chinese New Year (from February 1, 2022) is already casting shadows, making it difficult to plan for bookings to China and the Far East.

The Port of Ningbo is experiencing delays due to a lockdown in the Zhenhai and Beilun districts following new COVID cases. The port itself remains open. Container loading and unloading operations at the port are currently proceeding normally. However, truck traffic from the port to several districts in the region has been suspended. Many local shippers are responding to the restrictions and shifting their volume for exports to Shanghai, which is also congested. This is to avoid further overland delays (source: theloadstar.com).

Since last weekend, the port city of Tianjin, near Beijing, has also been partially sealed off following a COVID outbreak. Exit controls have been set up and mass tests are being conducted in the city. Tianjin Port Group assures normal terminal operations so far and says there are no indications of delays.

For imports from Asia to Europe, delays in China are also having a noticeable impact. Rates remain high throughout. Free slots are scarce.

For export from Europe to North America and Mexico, the situation remains the same: Full ships, rates at a high level, long waiting times off the US West Coast. Specifically, the waiting time in Long Beach is up to 40 days, in Los Angeles up to 28 days. Full ships and high rates to South America as well. This affects both the east and west coasts (SAEC / SAWC).

MSC is the winner in the race for container ship capacity in 2021, according to data from an annual survey by analysis tool Alphaliner. MSC added 411,000 TEU of capacity last year, mainly through the purchase of used containerships. Maersk also made gains. Other shipowners emerged with losses in capacity for the full year 2021 (source: theloadstar.com).

RAIL FREIGHT 

The violent clashes between demonstrators and state forces in Kazakhstan have so far not affected the stability of the rail link on the New Silk Road. According to research by the industry medium RailFreight.com, several sources confirmed this when asked directly. However, the GPS in the containers is affected by the disruption of the Internet in the country. No all-clear can yet be given for freight transport by rail, he added. This would depend on further developments in the country (source: railfreight.com).  

For the SENATOR Asia Rail Bridge (SARB), bookings should be made early in view of Chinese New Year for the coming weeks - at the latest within the next 7 - 10 days. The lockdown in Xi'an has a massive impact on train handling. The city is an important hub for rail traffic. Noticeable delays are still to be expected. 

CURRENT SITUATION WORLDWIDE

BRAZIL 

COVID is also having a noticeable impact on Air Freight. Staff shortages and flight cancellations are reducing available capacities. For imports from Europe, Asia and the USA, the situation is critical: high rates and waiting times for clearance. For export, space confirmation can take more than 3 weeks depending on destination.

For Ocean Freight, demand remains high. As a result, rates will partly increase again, among others for import from Europe and Asia.

CHINA

Chinese New Year (from February 1, 2022) and the Beijing Winter Olympics (from February 4, 2022) complicate the COVID situation in the country. The zero covid strategy, which continues to be practiced, leads in part to ad-hoc lockdowns and disruptions in delivery traffic. As a result, further significant disruptions in supply chains to and from China can be expected. China's ninth largest cargo airport in Xi'an is experiencing numerous flight cancellations following a new COVID outbreak. Other parts of China are also affected by the virus (source: theloadstar.com).

Airline Cathay Pacific has suspended all long-haul freighter and cargo-only flights to and from Europe for the entire first quarter. Background: Hong Kong authorities have extended the quarantine period for incoming cargo aircraft from three to seven days. The additional quarantine time reduces the number of available pilots. This makes it difficult to maintain a normal flight schedule. The current decision means a significant loss of cargo capacity to and from Hong Kong for all shippers (source: freightwaves.com).

GERMANY 

As of January 1, 2022, a change in the law regarding the VAT exemption of transport services directly related to the export or import of goods takes effect. With reference to the ECJ ruling C.288/16, L.C., the VAT exemption will be limited. In principle, the tax exemption only applies to the service provided by the main carrier, but not to the services provided by the sub-carriers. Background: The transport services are provided to the main carrier.

Accordingly, SENATOR INTERNATIONAL invoices transport services in connection with the export or import of goods, for which, however, SENATOR was commissioned by a main carrier (e.g. freight forwarder), subject to tax within Germany or with reverse charge within the EU.

This also takes effect for France and Spain.

MEXICO 

The number of COVID cases is also rising rapidly in Mexico. Both seaports and airports are affected. Departure and flight cancellations are the result. In some cases, there is a lack of sufficient personnel. Prices for Air Freight are rising on almost all routes. Available seats are scarce, especially to and from China. In traffic with the USA, there are several flight cancellations due to staff shortages among crews.

For Ocean Freight, Chinese New Year should also be planned for here in traffic to and from Asia. Some services to the neighboring LATAM region are currently operating irregularly. Departure times are being changed and in some cases there are noticeably longer waiting times. From Germany to Mexico SENATOR offers LCL and FCL solutions to Altamira and Veracruz at high performance rates. 

SOUTH AFRICA

Despite continued high case numbers of COVID-19, the country remains in low lockdown level 1. Since Monday, most stores have reopened and businesses are also said to be slowly returning to office rather than remote office operations. 

Air Freight had been expected to see price increases at the beginning of the year. In fact, a slight drop in crude oil prices and the strengthening of the South African rand (ZAR) has now had the opposite effect: fuel prices were adjusted slightly downward in early January. Meanwhile, many airlines resumed passenger operations to and from South Africa in December. Regional traffic is also active again. But there are still far fewer flights than before the pandemic.
For Ocean Freight, shipowners and truckers complain of continued congestion at the two main container ports in Durban and Cape Town. The congestion has been attributed to poor management on the part of the port authority. Too many employees were sent on vacation over the holidays, they said. Demurrage has increased by an average of 2 additional days for shipowners.

USA   

U.S. carrier Atlas Air has ordered four new B777 freighter aircraft. The first is scheduled to join the fleet in November this year. The other three are scheduled to arrive later in 2023. The investment follows record revenue of more than $1 billion and net income of $119.5 million achieved in the third quarter of last year. To date, the airline has 14 B777F aircraft (source: theloadstar.com).

For Ocean Freight, both the Ports of Los Angeles and Long Beach are again delaying the implementation of the container dwell fee. This was originally announced for October 25, 2021. The deciding factor for the postponement: older cargo at the ports had declined by a total of 35% since the announcement. As expected, the year-end holidays slowed progress compared to previous weeks. In the long term, the fees will be reinvested in programs to increase efficiency and accelerate cargo speeds (source: splash247.com).

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