Freight Market Update - Week of May 19, 2022

• IATA is calling on Asian governments, especially China and Japan, to ease or remove most of its Covid-19 measures for vaccinated travelers to accelerate air passenger traffic in the region.
• Shanghai’s officials are starting to ease Covid-19 related restrictions with the goal of a full reopening of the city in June.
• After hitting seven week highs, oil prices decreased 2% this week.
• US imports are expected to grow in the summer months due to approaching peak season and expiration of China lockdowns. This will increase the risk of congestion in all major US ports.

Air

• As passenger demand starts to ramp up, some airlines are returning their converted cargo-in-cabin fleet to passenger aircraft. To satisfy high demand for air freight, airlines are relying on additional belly space of passenger flights and pre-ordered cargo aircraft.

Ocean

• With the peak season approaching and anticipated volume increases after China shutdowns expire, US imports are expected to grow in summer months, thus increasing the risk of congestion in major ports.
• US port congestion is continuously improving with both West and East Coast ports recording decreases in cargo volume.

Air

• Latin American airlines are reporting growing passenger traffic, resulting in additional flights to increase capacity.

Air

• In a push to accelerate the recovery of air passenger traffic, IATA is calling on Asian governments, especially China and Japan, to remove all restrictions for vaccinated travelers and end quarantine and Covid-19 testing for unvaccinated travelers where there are high levels of population immunity.

Air

• The air cargo industry is preparing for the new upcoming EU Import Control System (ICS) security regulations. Beginning March 2023, airlines will have a new centralized system to submit shipment information.
• Antonov Airlines has transferred its operations base from Kyiv, Ukraine, to Leipzig, Germany.
• Although demand has begun to ease, the air freight rates are still increasing. Rates are predicted to rise further after China lifts its lockdown restrictions.

Ocean

• Space remains critical due to port congestions at both ends of the transatlantic lanes, especially the US inbound lanes.

Air

• Saudia, a Saudi Arabian airline, has ordered seven passenger-to-freighter conversions of their Boeing 777-300s to support its e-commerce cargo. The carrier also stated that it would build a facility dedicated to aircraft modifications and conversions of passenger-to-freighter aircraft for the future.

Ocean

• Durban Port in eastern South Africa remains congested but the situation is improving daily. Despite the improvement, regional flooding and power rationing are still impacting the area.
• Equipment deficits continue across many Indian ports.
• Port of Salah is expanding its operations equipment to enhance its services and general cargo handling. The expansion will ease the environmental impact caused by the Port.
• The Indian Railways plans to expand 3000 km of rail lines to connect to an additional 27 ports.

• New Zealand has a dispute filing of Canada's dairy tariff rate quotas (TRQs) under the Comprehensive Progressive Agreement for Trans-Pacific Partnership (aka CPTPP). Canada has until May 19 to respond to New Zealand's request for consultations. If consultations fail, New Zealand has the option to request the formation of a dispute settlement panel.

• Shanghai officials announced plans to start removing all Covid-19 related restrictions by June 1. The phased removal of the restrictions will take until end of June to complete.

• After hitting seven-week highs, oil prices decreased 2% this week. Brent crude fell $2.31 to settle at $111.93 a barrel. US West Texas Intermediate (WTI) crude fell $1.8, and settled at $112.40 a barrel.