+++ ALWAYS UP TO DATE WEEK 36 +++

Regular information on current developments

What is currently shaping the market for Air Freight? What for Ocean Freight? What in areas such as China, Mexico or USA? You can read interesting facts here.

GENERAL INFORMATION

The war in Ukraine, strikes and high energy costs are keeping the market on edge. The situation remains challenging for all modes of transport.

SENATOR continues to be affected by fluctuating prices in line with market developments. Depending on the case, this may mean surcharges for certain shipments. Please note: For detailed and product-related questions, please contact your personal SENATOR contact person directly.

AIR FREIGHT

The vacation season is over for the most part. This is also reflected in the air freight market, among other things in increased capacities.

Prices for jet fuel are rising again. The brief easing in price levels in July and August is therefore no longer applicable.

Twice a year there is a change of flight schedules, the next one will take place on 30th October. SENATOR is currently in intensive negotiations with the airlines. All with the goal of ensuring the best prices as well as capacities for our customers in the winter season.                

OCEAN FREIGHT

Rates for Asia's imports are currently under extreme pressure. The shipping companies are already reacting with suspended ship departures, the so-called Blank Sailings. It is expected that almost 10% of capacity will be cut in this way over the next 12 weeks due to the Golden Week from 1st till 7th October.

Important port cities such as Shenzhen, Guangzhou, Dalian and Tianjin have again imposed restrictions of varying intensity against the spread of the Corona pandemic.

Capacity to North America remains tight. Rates are stable but at high levels. They may even increase slightly in Q4.

Currently there are 8 container ships only waiting for berths at the ports of Los Angeles and Long Beach. The container ship congestion has thus almost disappeared on the US West Coast. On the East Coast, however, the situation is different. The number of waiting container ships is at an extremely high level of around 130 ships (Source: freightwaves.com).

Port of Liverpool dockers will go on strike for 2 weeks on 19th September after management's proposals for the latest contract extension were rejected. Several shipping companies are already working on contingency plans. They also announced they would use alternative handling facilities.

In German ports, an agreement has been reached in the wage dispute with dockworkers, so finally  further strikes are not expected.

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. Thank you for your understanding.

At the end of August, a new rail freight service between China and Vietnam went into operation. The train starts from Kazakhstan, via the Chinese hub Xi'an towards Hanoi. This is the start of the 1st rail connection between Vietnam and Shaanxi Province (source: railfreight.com).

CURRENT SITUATION WORLDWIDE

BRAZIL

Brazil's economy grew by 1.2% in the second quarter. This exceeded the expectations of the analysts surveyed by 0.9%. The new result puts GDP 3% above the pre-pandemic level, but still 0.3% below the historical series record set in the first quarter of 2014.

However, a slowdown is expected in the second half of the year, despite the incentives adopted by the federal government for the election period (Source: 1.folha.uol.com).

CHINA

Lockdowns continue to occur in China's major metropolitan areas. Chengdu, with a population of 21.5 million, was completely locked down on 1st September. Major economic centers such as the port cities of Shenzhen, Guangzhou, Dalian and Tianjin imposed restrictions of varying intensity last week.

Beijing's government has abandoned its target of a 5.5% increase in gross domestic product this year, with estimates for 2022 now at 3%.

Nearly a quarter of European companies in China are considering moving their investments out of the country. Main reason: the country's stringent policies, according to a survey published in June by the EU Chamber of Commerce in China. The U.S. and British chambers of commerce expressed similar sentiments (Source: splash247.com).

MEXICO

As in previous months, the current price level for air freight is still high. Capacities to Asia are available. From Europe to Mexico, customers can book our own controlled cargo flights from Frankfurt (FRA) to Mexico City (MEX), safely and reliably.

For Ocean Freight from Asia, freight rates are moving downwards. It is currently difficult to book free capacities from Europe.

SOUTH AFRICA

Transnet, the parastatal operator of the port and rail network, has been unable to reach an agreement with SATAWU (South African Transport & Allied Workers Union) on wages and working conditions for employees. Talks have been ongoing since May 2022, so a port and rail strike is becoming more and more possible.

The supply crisis at the national power company Eskom is far from over, but the power grid appears to be relatively stable. However, unforeseen supply outages are still possible.

The ZAR has depreciated by about 8% since mid-August, mainly due to the strengthening of the USD. This has had a corresponding impact on fuel prices and import costs. The transport of goods thus remains expensive.

USA

Normally the month of September is considered as start of the high season of air freight between China and the USA and vice versa. However, the current dispute between the U.S. and China is causing capacity bottlenecks.

In fact, last week, the U.S. government canceled 26 flights operated by Chinese airlines for September. This was in response to the Chinese government's cancellation of U.S. airline flights due to covid cases. The affected airlines are on Chinese’s site: Xiamen, Air China, China Southern and China Eastern, and on American site: Delta and United (source: theloadstar.com).

Stay UP TO DATE with SENATOR INTERNATIONAL

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