+++ ALWAYS UP TO DATE WEEK 25 +++

Regular information about current developments

What is currently shaping the air freight market? What about sea freight? What about the rail connection with China? Read more.

AIR FREIGHT  

Imports to USA continue to boom. Within the USA, sales are picking up strongly. Inventories are barely sufficient. The number of PAX flights (passenger flights with cargo) continues to be around 50% lower than in 2019.

Consequence: continued high demand and rising rates. The current situation is expected to last longer. Changes to air cargo screening will also take place as of June 30th, 2021. Specifically, it will be mandated that all-cargo aircraft will be subject to the same standard of security screening as cargo shipments on passenger flights have been. Potentially, this will mean further delays and additional costs.

The situation in China's ports (especially Yantian / Shenzhen region) is having a massive impact on supply chains worldwide. Cargo is already switching to Air Freight in some cases. Demand for air freight to South Africa is also expected to increase again due to delays in sea freight.

OCEAN FREIGHT   

There is still a lack of capacity for exports and imports between Europe and Asia. In addition, there are ship delays. Due to a COVID-19 outbreak, the authorities had closed the port of Yantian (South China) at short notice. The consequences for the entire region as well as globally networked shipping schedules were - and are - serious. The port is still not in regular operation. The situation is only slowly improving. Ships are partly diverted to other ports (Nansha, Shekou, etc.).

The port of Hamburg is also suffering from ship cancellations. Delays cause shipowners to change routes. MSC and Maersk will not call at Hamburg with some services until the end of July 2021. Only Bremerhaven will be served. Rotterdam is also affected. The Alliance shipowners are skipping Europe's largest container port on the FE4 service until calendar week 31.

Port Klang (Malaysia) is experiencing significant delays. CMA CGM will not accept cargoes bound for Australia/New Zealand transhipped at Port Klang until the end of July.

The hearing scheduled at an Egyptian court regarding the container ship EVER GIVEN, which is tied up there, was postponed again. New date: July 4th, 2021. This is to give the parties SCA (Suez Canal Authority) and the owner of the ship the opportunity to reach a compromise.

Imports from Asia to Europe continue to face many challenges. Free space? In short supply. Equipment? In short supply. Rates? At record levels. In addition, the situation in China's ports complicates the situation. Experts fear: chronic congestion in Asia, such as at Yantian, will drive rates to North America and Europe even higher. This could result in shortages of low-value goods. Despite improvements at Yantian, it will take months to completely clear the backlog, he said (source: theloadstar.com).

Similarly for exports from Europe to North and South America: full ships and high rate levels. In the USA, ships are jammed in front of important ports. There is still a lack of equipment. Hinterland transports by truck are particularly critical. There is a nationwide shortage of chassis. Rates are up to 60% above normal. Cause: extreme imbalance between supply and demand. Truckers can obtain horrendous prices. The truck situation is not expected to ease by the end of the summer.

RAIL FREIGHT  

The provider Eurasian Transit has acquired a new transshipment terminal on the Kazakh-Chinese border. The facility is in the first phase of construction. Once completed, the maximum capacity will be 700,000 TEU (20-foot standard containers). The aim of the new facility: to facilitate cargo handling between China and Kazakhstan (source: railfreight.com)

CURRENT SITUATION WORLDWIDE

BRAZIL   

The vaccination campaign is progressing slowly. Officially, 11.3% of the population received the second dose. For the economy, the situation remains confusing. 

For Air Freight, the number of PAX flights (passenger flights with cargo) remains significantly lower than before COVID-19. Capacity is lacking. However, some airlines are gradually returning to Brazil. Low passenger traffic is partly compensated by cargo. Rates are at a high level.

For Ocean Freight, the situation remains tense. Exports and imports are equally affected. The East Coast of South America is experiencing an upswing on the trans-Pacific route (Asia to America). There is a lack of capacity for trans-Atlantic. For export from Brazil, full ships, rates to Latin America and North America continue to increase. For reefer shipments, there is a lack of suitable containers. Bookings should be requested as far in advance as possible. 

CHINA 

On July 1st, 2021, China will celebrate the 100th anniversary of the founding of the Communist Party. Delays for shipments to/from Beijing can be expected from June 26th to July 1st. This affects terminals, ground handling and truck traffic. 

Specifically, the following measures should be noted: 

Beijing and Tianjin airports largely not allowing handling of hazardous materials until July 3rd. Tighter security checks at terminals and for trucks in the greater Beijing area, as well as temporary traffic restrictions and closures. 

For questions please contact our team at SENATOR Beijing: 
Inquiries.bjs(at)bjs.senator-international.com
 

MEXICO  

For Air Freight, the situation has eased somewhat. Passenger flights from Europe and North America to Mexico are increasing. PAX options provide some breathing space to a heated market. Towards South America the situation is constantly critical.

For Ocean Freight, rates continue to rise for imports from Europe and South America. For Asia to Mexico, equipment availability improves slightly. However, rates continue to rise here as well.

SOUTH AFRICA 

Trade on overland routes is affected by government actions to contain COVID-19. Key border crossings between South Africa and neighboring countries lack health officials to monitor COVID-19-compliant operations. Although borders were regularly supposed to be open until 10 p.m., some were closed as early as 6 p.m. last week. As a result, long waits continue outside border crossings into Botswana and Zimbabwe. Drivers report delays of between 24 and 48 hours.

USA   

Trade continues to boom and with it Ocean Freight. Many ports are congested. In addition to the West Coast (primarily Los Angeles - Long Beach), this has long affected the East Coast and the Gulf of Mexico: especially Charleston (North Carolina), Savannah (Georgia), Norfolk (Virginia) and New York (New Jersey). Congestion is expected to continue through the summer. Background: a surge in U.S. import volumes and irregular shipping schedules. 

For Air Freight, the transatlantic route remains busy. High demand keeps rates high. Despite the increasing frequency of cargo and passenger flights between Europe and the USA, capacities remain well below pre-COVID levels. The same applies more and more to transpacific trade. In particular, imports from China to the USA are increasing.


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