Freight Market Update - Week of July 21, 2022

• North America leads in air cargo recovery as carriers saw an increase in cargo volume by 15% in May compared to May 2019.
• The Port of Oakland’s largest marine terminal is temporally closed due to truckers’ protests.
• Due to contracts negotiations, shipments from the Asia-Pacific region are shifting from US West Coast Ports to East Coast and Gulf Coast Ports.
• Although the German dockworker's strike has finished, access to the Port of Hamburg is limited due to the overcrowded infrastructure.

Air

• North American cargo carriers saw an increase in air cargo volume by 15% in May compared to May 2019, as the North American region leads in market recovery. The main driver for the increase is an expansion of cargo capacity by many airlines and the recovery of the passenger market.

Ocean

• The Oakland International Container Terminal, the Port of Oakland’s largest marine terminal, is temporally closed due to the California Assembly Bill 5 (AB5) protests by truckers. These protests will cause supply chain disruptions at this port.
• Shipments from the Asia-Pacific region are being diverted from West Coast ports to East Coast and Gulf Coast ports. The expiration of the West Coast longshore labor contract talks are the main cause of this shift. Many sources are optimistic that an agreement will be reached in August or September. East Coast and Gulf Coast Ports will continue to see increased volume while the labor contract is negotiated.

Air

• In Brazil, LATAM Airline's passenger capacity is already higher than in pre-pandemic times. The increase in passenger travel will reflect in air cargo belly capacity.

Ocean

• The Panama Canal approves a new toll structure that will simplify some tolls while also initiating a fee on containers returning to the Asia-Pacific region. This effort may lead to higher capacity along this trade lane.

Air

• Airlines have reduced summer scheduled widebody belly cargo capacity by -13% since published schedules in April. Around 80% of scheduled capacity revisions were made on trade lanes related to Asia-Pacific region.
• Shanghai Pudong Airport experienced a surge in cargo throughput after a steep decline during the citywide lockdown. Cargo throughput grew by 40.7% in June compared to the prior month.

Ocean

• The Mediterranean Shipping Company (MSC) is expanding its Transpacific network coverage servicing the Asia-Pacific region with the US Gulf Coast and South Atlantic trade lanes.
• As of July 18, carriers announced 21 blank sailings for the Transpacific Eastbound lane for the month of July, reduced 9.9% from normal capacity. There are 10 blank sailings reported thus far for August for the Transpacific Eastbound lane.

Air

• The UK government announced the requirement of a 10% jet fuel to be Sustainable Aviation Fuel (SAF) by 2030. The initiative will ensure more sustainable air operations in the long term, with possible rate impacts in the short term.
• Georgian Airlines and Aircompany Armenia have announced they will be expanding their operations with the addition of three Boeing converted freighters that will become dedicated cargo planes ready to serve by 2024. Capacity in the Caucasus region may increase with these additions.
• New service was added to Billund Airport by Virgin Atlantic Cargo, expanding the cargo network. Service will be available three times per week between Denmark and England with availability of 28 tons of capacity for each flight. Flights are to begin on August 3. The new service will connect the US with the Scandinavian region directly.

Ocean

• Although the German dockworker's strike has finished, access to the Port of Hamburg is limited due to the overcrowded infrastructure. The port has also been impacted by a driver shortage and has reduced capacity to secure coal and grain transportation. Delays are expected.

Air

• A new cargo facility opened in India Kempegowda International Airport in Bengaluru. This opening has also expanded intercontinental flight availability with Asia, Europe, and the Americas. Capacity availability has increased.

• Several US Customs and Border Protection’s (CBP) trade enforcement measures have accelerated this year according to statistics by CBP. Importers should continue to develop, implement and monitor effective compliance programs as they could result in full-blown audits and enforcement actions.

• June global air cargo capacity was down -4% vs. 2019. Meanwhile, direct Transatlantic air cargo capacity is almost equal to 2019 levels due to the increased flight frequency and the passenger flights’ recovery.