Freight Market Update - Week of January 13, 2022

• Covid-19 outbreaks and restrictions are impacting supply chains around the globe
• US starts the year off with growing ports congestion due to winter holidays and rising Covid-19 cases
• The Ports of Los Angeles and Long Beach delay impending “super demurrage” fee until January 17

Air

• Air Canada announced plans to cancel several flights to popular vacation spots, known as “sun destinations”, in light of the recently worsening pandemic. Affected destinations include: Antigua, Aruba, Samaná, Curaçao, Exuma, Grenada, Puerto Plata, Santo Domingo, Bermuda, Grand Cayman, Havana, Saint Vincent and the Grenadines, Saint Martin/Sint Maarten, and Saint Kitts and Nevis.
• East West Aeronautical LLC has begun plans for an air cargo and aviation complex at Portsmouth International Airport at Pease in New Hampshire, US. The current design includes plans for an air cargo processing warehouse, a multi-purpose hangar, and more.
• Philadelphia International Airport in Pennsylvania, US, has secured government funding to help expand its current facilities. Plans will almost triple the airport’s cargo building square footage and expand its cargo facilities by 136 acres.
• Flight cancellations remain a huge issue in the US as airports continue to struggle to fill labor gaps left by the recent surge in Covid-19 cases.
• Plans to increase cargo capacity by building a “Vertically Integrated Cargo Community” (VICC) at Miami International Airport have been deferred pending more details, vetting, and negotiation.

Ocean

• The “Super Demurrage” fee at the Ports of Los Angeles and Long Beach has been delayed again, this time until January 17. The fee, which was originally announced in October 2021, was proposed to help reduce container backups at the ports.
• Berth capacity at the Ports of New York and New Jersey is tight due to impacts of the holiday season and the rapidly spreading Omicron variant on labor forces. Some ships report wait times of up to four days before they can dock and unload.

Rail

• On January 9, Union Pacific Railroad eliminated its peak season surcharges on excess domestic intermodal contract loads, indicating recent improvement in rail congestion levels.

Ground

• Canada has announced a vaccine mandate for all truck drivers attempting to enter the country. The Canadian Trucking Alliance fears that the mandate, which will take effect on Saturday, may worsen the current truck driver shortage.
• Transportation and warehousing saw seasonal employment surge in the holiday season, but according to data released by the US Bureau of Labor Statistics (BLS), nonseasonal trucking employment remains down.
• Labor shortages caused by recent surges in Covid-19 cases are resulting in loading and unloading delays, hitting already-strained trucking capacity hard.

Air

• Hundreds of flights were cancelled in Brazil due to diagnoses of Covid-19 and the flu among crew members. Three major airlines in the country, including Azul Airlines, GOL Intelligent Airlines, and LATAM Airlines, have all been affected.
• Columbian airline Avianca announced plans to open seven new routes, including flights to Colombia and Costa Rica.
• Air Canada resumed flights between Santiago, Chile and Toronto, Canada this month.
• The International Air Transport Association (IATA) reported slower growth for air cargo in 2021, with capacity down 20.1% compared to pre-pandemic levels in Latin America.

Ocean

• Brazil’s Portonave Terminal in Santa Catarina grew 29% 2021. The Port of Navegantes (Portonave) remains the leading container handler in Southern Brazil.

Air

• Hong Kong has banned incoming flights from eight countries including India, Pakistan, the Philippines, the US, Australia, the UK, Canada and France from January 8 through at least January 22.
• Representatives of Shanghai Pudong International Airport (PVG) announced that the airport’s fourth phase of expansion will feature a cargo area, along with new terminals, transport facilities, and more.

Ocean

• Import and export operations in Tianjin are experiencing challenges due to a recent increase in Covid-19 cases.
• Lockdown restrictions and mass testing requirements continue to cause delays at the Port of Ningbo.
• Concerns over the situation are causing some shippers to divert cargo to Shanghai and Xiamen.

Air

• Cargo throughput at Ukraine’s Boryspil International Airport reached record levels in 2021 compared to the last four years. The airport has planned a new air cargo terminal to meet the growing demand.
• Belgium’s Ostend-Bruges International Airport has set a record for handling its highest volume of cargo since 2011.

Ocean

Asia-Pacific Westbound:

• Rates have increased slightly in the first half of January and could continue rising due to the pre-Lunar New Year Peak Season.
• Space and equipment availability is still severely limited, especially as carriers continue to impose blank sailings and port omissions.
• We recommend booking 4 to 6 weeks prior to scheduled vessel departure.

Transatlantic Westbound:

• Rates are likely to remain stable this month.
• Schedule reliability is expected to worsen as winter weather batters the North Atlantic.
• Carriers continue to implement blank sailings, port omissions and changes in port rotations in the mid-term and on short notice.
• The space and equipment situation is still critical.
• We recommend booking at least 4 to 5 weeks prior to scheduled vessel departure.

Europe-Latin America:

• Space is still very tight to the West Coast of South America (WCSA) and Mexico. We recommend booking 4-5 weeks prior to scheduled vessel departure.
• Many major European ports are still facing heavy congestion and bottlenecks, and these conditions are expected to continue into the foreseeable future.

Rail

• Freight trains traveling between China and Europe made a record 15,000 trips in 2021, up 82% from pre-pandemic levels.
• The growing popularity of rail freight has resulted in traffic on some routes, which could limit the ability of rail freight to serve as an alternative to ocean freight.

Ground

• Fuel prices are on the rise in Belgium, leading many to fear consequences of structural inflation.

Air

• Etihad Airways and China’s Henan Province Airport Group have signed an agreement to establish new cargo services between Abu Dhabi International Airport and Zhengzhou Xinzheng International Airport (CGO), boosting cargo service between the United Arab Emirates and China Mainland.
• Israel Aerospace Industries’ “conversion hub” in Abu Dhabi will offer conversions of two popular passenger planes – the Boeing 777 and Airbus A330 – into cargo aircraft in the upcoming years.

Ocean

• China United Lines (CU Lines) has announced a new sea service between China and the Middle East. The five-ship service, which launches next week, will connect Vietnam, Thailand and Malaysia with the United Arab Emirates via Mumbai.
• New waterways are under construction that will connect northeast India with West Bengal to facilitate cargo and passenger movement via Bangladesh.

Rail

• The government of India plans to build a Regional Rapid transit system to connect Delhi to Hisar. In total, up to ten new railway stations will operate between the Eastern and Western freight corridors of India, passing through Haryana.

• Amendments to the World Customs Organization (WCO) Harmonized System (HS) took effect on January 1.
• Corresponding amendments to the United States HTS Codes have been delayed until January 27.
• To learn more about the HS Code system and what changes are in place this year, read our Importer’s Guide to HTS Codes.
• New or modified FDA import alerts have been posted on blackberries, cosmetics, Covid-19 test kits, and more. Get more details on the newly added items here.

• Lunar New Year holidays in Asia begin this year on February 1 and continue through February 15. During this time, factories and businesses in the region may be operating at reduced capacity, and some may even shut down as employees return home to celebrate. For more information about how the Lunar New Year holidays may impact your business, and what steps you can still take to keep your freight moving, click here.
• Port congestion continues to impact supply chains, and cargo shipping delays should be expected worldwide.
• US Secretary of Transportation Pete Buttigieg visited the Ports of Los Angeles and Long Beach this week. Among the topics publicly discussed were the $52 million grant for Long Beach’s Pier B on-dock rail facility, federal support to address port congestion, and the bipartisan infrastructure law.