DSV MARKET UPDATE – APRIL 2024

Dear customers,

Please find attached the market update for April 2024 for Air & Sea.

DSV Israel

The red sea crisis is still influencing the traffic from the Fareast to Israel and the global market as well.

Most of the shipping lines have decided, to stop all voyages through the Suez Canal for the time being, and to have their vessels operate via the Cape of Good Hope.

Other options are shipping by ocean from the Fareast to Bahrain or Jebel Ali ports, trucking to Sheikh Hussain,  clearing from customs at the cross border, trucking the shipments to final destinations in IL.

A Few shipping lines stopped confirming bookings into Israel.

The situation causes longer transit time , lack of capacity,  and shipments switched from Ocean to Air to meet the lead time.

We faced higher ocean freight rates & additional surcharges . ocean freight rates are currently stable based on March reductions.

The political crisis with Turkey is effecting in the supply chain mainly on the ocean fright to Israel. DSV Israel is working on alternative solutions for the Israelis importers.

Our teams are at your service to find solutions to the situation.

Airfreight

Due to Iran’s attack on Israel Saturday night 13th Apr 2024 we faced temporary suspension of flights into/from Israel for the last few days.
Below is the status as of today –
The airports in Israel are operating as usual, the Israeli airlines are operating as usual as well as CHALLENGE (CAL).
Most international airlines suspended flights to/from Israel and gradually returned to operations.
LUFTHANSA- Will operate flights to and from Israel starting April 18, 2024
AIR INDIA – Is supposed to operate their flights to Israel from Sunday, April 21, 2024
UNITED – The flights are temporary suspended, waiting for an update regarding the date of their return.
AIR CANDA – The flights are temporary suspended until the end of April 2024.
*There may be changes due to the situation, we will continue to monitor and update accordingly
Some of the International airlines are postponing resuming their flights to/from Israel since the 7th Oct 2023  due to the war.

Following the stormy weather that caused the floods that hit the Gulf countries, the airport in Dubai is close. All incoming flights were diverted to an alternate airport and there are delays in departed flights and arrival to final destinations. Since the airport in Dubai serves as a central transit airport from many countries in the world, this means delays and postponements of flights and their arrival at the final ports. In addition, the weather also affecting the inland transportation and ocean activities from the port of Jebel Ali, which serves as a significant transit port for ocean fright from Asia, since the crisis in the Red Sea and significant delays are expected.
There may be changes due to the situation, we will continue to monitor and update any changes.

GLOBAL

We have just been impacted during last week with the news of missile attacks of Iran and its allies against Israel during last weekend and the hijack by Iranian special forces of a 14,300 TEU MSC vessel near the strait of Hormuz, on its way to India, escalating the geo-political risk to the Persian gulf.

 General update

• China’s Central Bank Holds Key Policy Rates, Drains Liquidity From Banking Sector The People’s Bank of China held the one-year medium-term lending facility at 2.5%.
• U.S. Economy Expected to Keep Powering Higher Economists on average think the economy grew at a 2.2% rate in the first three months of the year, up from a 0.9% forecast in January.
• ECB Signals It’s Moving Closer to a Cut but Keeps Rates Steady The European Central Bank held its key interest rate at a record high and signalled it won’t begin cutting rates before June.

Red Sea Attacks

• Yemeni Houthis vow to extend ship attack to Indian Ocean
• Iran seizes UK-owned boxship MSC Aries The 14,300 teu MSC Aries (IMO: 9857169), which had 25 crew on board at the time of the attack, was boarded by Iranian special forces about 80 km off the coast.
• New shipping potential risk around the strait of Hormuz, Possible increased risk premiums to and from the Persian Gulf area as well as Gulf of Oman – not necessarily labelled as a risk premium but potentially as PSS, Congestion Surcharge, War Risk Surcharge or some new type of acronym
• Israel Repelled Iran’s Huge Attack With Help From U.S. Europe and Arab Partners Iranian launched a strike on Israel. Iran launched more than 185 explosive-laden drones, around 103 ballistic missiles and about 36 cruise missiles, according to Israel. The damage could have been catastrophic. As it turned out, almost all were intercepted
• Overall impact of capacity on Red Sea attacks The number of ships diverted to the Cape route have edged up slightly over the past weeks, with capacity on the Asia-Europe routes ramping up ahead of the summer peak season.

OCEAN:  we start to see a stabilization of the rates, after the effects post Chinese new year and carriers actively managing capacity, the Panama Canal is developing positively and we see an increase of transits.

After the dramatic accident in the port of Baltimore in USA, we see not a big impact in terms of congestion in the area, absorbing the capacity to other near ports le re.  . downward trend in the rates now that the market has found its “new normal” in dealing with longer and costlier routings via Cape of Good Hope, and at the moment we are looking for a new normal looking at the events happening in the middle east and the Panama canal.

AIR: the situation is still critical for shipments from Bangladesh and India,  where we are seeing a translation of garment ocean volumes heavy affected by the Red Sea disruption into Airfreight. Volumes from Asia and South Asia are still strong driven by the e-commerce effect, both Air and Ocean volumes are higher than last year.

 Ocean freight highlights:

• Baltimore port shutdown has limited impact on container volumes to US
• Strong volume growth on 2024, The latest data on container shipping volumes show continued strong growth. In the first two months of 2024, 27.8m TEU have been moved globally, 10.7% – 8% up from the same period last year.
• Ocean Spot rates are beginning to stabilize
• US Container import volume trajectory is strong, U.S. container import volumes in March climbed by 0.4% from February and over 15% from March 2023
• China to Mexico: Accumulated volumes for January and February are up 50%
• Carrier reliability at 54% (Small improvement of 1,7%)

 Airfreight highlight

Global air cargo market demand rose +11% year-on-year for a third consecutive month in March

Average global rates rose, week on week (WoW), by more than +2%, Driven by Asia Pacific

Increases from Indian Sub-Continent  & South Asia to Europe

Dubai-Europe demand still booming.