Freight Market Update - Week of November 18, 2021

• Ports of Long Beach and Los Angeles postpone “super demurrage fee”
• Europe ground freight continues to suffer due to high fuel prices and labor shortages
• Electricity shortages and Covid-19 outbreaks impact Chinese export production

Air

• New Canadian airline Lynx Air will begin low-cost domestic flights next year.
• UPS healthcare will expand its cold packaging operations with the addition of three facilities, two in Europe and one in the United States, in 2022.

Ocean

• Queues at ports around the US are starting to increase again, and the Ports of Los Angeles and Long Beach reached a new record of 83 containers waiting at anchor last weekend.
• Port authorities reported a 23 percent drop in long-dwelling containers at Long Beach since November 1 and a 14 percent drop at Los Angeles since October 24. But high import volumes from Asia may make the improvement short lived.
• The ports of Los Angeles and Long Beach have announced that they will delay plans to increase charges for extended container dwell times for one week. Both ports have reported a combined 26% reduction in the number of long-dwelling boxes since the fee was announced.
• Shippers report difficulty securing capacity for refrigerated goods, as ocean carriers have begun to prioritize more profitable dry containers.
• The ports of New York and New Jersey are expected to add around 500 employees to their workforce in 2022 to address the country’s growing cargo demands.
• Due to port congestion, ZIM Integrated Shipping Services is suspending its Asia–US West Coast expedited service call to Los Angeles (known as ZX3) for at least seven weeks. Six vessels that previously called on Los Angeles will be rerouted to Intra-Asia services. The service will resume on December 23.

Rail

• The Georgia Ports Authority has significantly increased rail capacity with 18 new tracks now operating at the Mason Mega Rail Terminal.
• Rail services at Port of Vancouver were suspended this week due to flooding, and authorities are unsure when operations will resume. Shipments of grain, coal, and potash will likely be affected by the temporary shutdown.

Air

• Mexico’s Red ASA has reported a 99.3% growth in cargo volumes since January 2021.
• Brazil’s Comandante Ariston Pessoa Regional Airport in Jericoacoara has announced plans to launch 19 new LATAM and Voepass flights in December.

Ocean

• The Mediterranean Shipping Company (MSC) announced that, beginning December 10, a general rate increase of $250 per container will take effect for all dry cargo moving out of the US Gulf Coast to the East Coast of South America, including ports in Brazil, Argentina, Uruguay, and Paraguay.
• The Chilean port of San Antonio reports challenging conditions, and some of its container depots have been forced to close due to full capacity (preventing empty containers from being returned to shipping lines).
• Brazilian Minister of Infrastructure Tarcísio Gomes de Freitas has planned a European “tour” to seek private investors to support the country’s transportation industry.

Air

• As passenger travel remains low, resulting limited belly capacity has caused November’s air rates from China to the United States to double compared to rates at this time last year.

Ocean

• Electricity shortages and Covid-19 lockdowns are slowing down Chinese export production, which could provide some relief for Asia-US exports.

Air

• Continued airport congestion is hurting cargo volumes in Europe, with the most severe delays occurring at Heathrow and Frankfurt, which face labor shortages.
• The peak season demand for air freight has risen due to ocean freight disruptions and time-sensitive holiday shipping needs.
• Some European airlines are temporary converting passenger aircrafts into freighters to address the growing demand for air cargo.
• Bulgaria-based Compass Cargo Airlines plans to begin service in Europe by end of 2021.
• GE Telesis converted six additional passenger aircraft to narrowbody cargo jets, bringing its total to 12.
• In November, Malta’s Airhub Airlines began widebody cargo operations.
• Latvian SmartLynx Airlines will add two converted freighters to its cargo lineup in 2022.

Ocean

APAC Westbound:

• Rates remain at record high levels as demand continues to exceed supply.
• Overall space and equipment situation is extremely poor.
• Schedule reliability is low due too continuous vessel delays and shifts.
• We recommend booking premium options when possible, and pre-booking 4 to 5 weeks prior to planned vessel departure.

Transatlantic Westbound:

• Rates will likely remain stable going into December.
• The space and equipment situation remains critical.
• We recommend booking premium options when possible, and pre-booking 5 or more weeks prior to planned vessel departure.

Ground

• European road freight continues to be hindered by high fuel prices and a shortage of drivers.

Air

• American Airlines Cargo began flights to New Delhi this month, with plans to expand the service next year. The flights will support India’s robust commodities market, which features textiles, pharmaceuticals and more.
• Emirates SkyCargo will expand its cargo capacity with two new Boeing 777Fs next year. The company also plans to convert four passenger Boeings into freighters between 2023 and 2024.

Ocean

• Maersk has announced a new joint venture with South African freight and logistics company Grindrod Limited with the goal of expanding its operations in the region.
• Qatari logistics service provider Milaha’s new China-India Express (CIX) service will connect China and Southeast Asia to Qatar, India, and the Gulf region.

Rail

• India is making efforts to transform its railway system, and the government expects that with the new improvements rail will be very profitable for the region over the next 5-6 years.

• The US government has extended Section 301 tariff exclusions for 99 medical care products from China through November 30, 2021.
  • In addition, 81 of those 99 products will get an additional extension through May 31, 2022.
  • These exclusions are applicable to any product that meets the HTSUS description and numbers.
  • For more information about the extensions and which products are included, click here.
• New or modified FDA import alerts have been posted on e-cigarettes, tea, seafood and more. Get more details on the newly added items here.

• Wholesale gas prices are rising in the United Kingdom and the European Union after Germany suspended approval of a Russian gas pipeline out of concerns that the line would increase Europe’s dependency on Russia.
• Emirates airlines and GE Aviation will test a flight using 100% Sustainable Aviation Fuel (SAF) in 2022.

• India will allow vaccinated travelers from 99 countries to enter the country with no quarantine period.
• US Transportation Security Administration (TSA) employees must prove they are vaccinated by November 22, 2021.
  • The American Federation of Government Employees has requested that the organization postpone the mandate until January, citing fears that employee concerns will affect morale and performance during the peak season for air travel.
• Hong Kong International Airport announced that “targeted groups” from its staff are going to receive a third dose of the Covid-19 vaccination to help ensure protection for themselves and passengers.