DSV Market update Air & Sea – October 2022

Dear Customers, 

Please find attached the latest market update for Air & Sea DSV Market update AS October 14th 2022 1

Key topics

• World economic Outlook slowdown: Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades.
• OPEC Slashes Oil-Demand Forecasts After Supply Cuts: Cartel points to elevated inflation, rising interest rates and geopolitical tensions as factors that will drag on demand
• China's major party congress is set to grant Xi Jinping a 3rd term: The world economy and trade is hoping some changes on “Zero Covid” policies imposed by the Chinese government this year. The meeting will take place on October 16^th
• US inventories are once more outpacing sales, limiting expected growth of US volumes in the short term

OCEAN:

• Global port congestion is at 10,5 % of the global vessel capacity effectively removed, it has eased for the first time in 9 months with both US and China recording lower levels, while we also see some improvements in the European ports.
• Rates : A lot of uncertainty at the moment, we see rates softening very quick now that we are ending the peak season and there is a lot of uncertainty about the future level of rates. At the moment there is high rate volatility in all trades.  

• IMO2023 regulation will kick in next year. Customers don’t need to do anything, but carriers will need to revise old vessels in terms of design, efficiency to be compliance. This can lead to implement in some vessels engine power limitation speed          and that would mean lower speed. We believe that regulation can   accelerate scrapping that was not done during the last two years.
• Orderbook record (new vessels) of MSC with 43% of its current fleet, this can mean in the future that MSC don’t need a partner to run their network and can operate and control 100% their own vessels.
• Transit times from Asia to US West Coast and Europe are improving, with US East coast and Wes Mediterranean are deteriorating, (we still have disruptions)
• Global shipping Lines performance is improving we are now at 46,2% reliability and 6.28 days of average delay.

Airfreight highlights;

• AIR: Demand is also softening but high cost due to fuel is still there. There is a replacement of capacity in some trades from cargo planes to passenger.
• Global international air cargo capacity is down -4% (Global international air cargo capacity grew slightly in last two weeks, mostly due to airline freighters)
• Year-over-year air trade growth figures have declined throughout 2022, with latest figures of -7% (vs 2021) in July
• Fuel prices are still near record levels, despite of some reductions
• Air cargo’s demand-supply balance on the Transatlantic trade lane has returned to pre-COVID levels

Yahalomit Barzilay Senior Director, Import

DSV Israel