DSV – Market update Air & Sea – Aug 2021

Local updates

Maman terminal warehouse – due to Covid outbreak at Maman terminal warehouse, many employees were sent home – there are sever delays (more than 72 hours to register an incoming shipment).

Ocean freight highlights:

Ocean ports situation: 332 vessels are waiting at the ports, about 10% of global vessel capacity, this problem we foresee growing as more issues are arising.
Ocean Freight Rates: are still escalating and it is more difficult to ship cargo, delays are also increasing.
China: one of the five terminals in Ningbo ocean port is still closed due to COVID.
Vessel reliability is below 40%, however the average delay in days is 6 days and its on the rise.
Los Angeles is reaching the worst congestion of the year.
Bunker prices going up, Scrubber growth slows despite widening bunker spread (due to all vessels are deployed).

Airfreight highlights:

Global air cargo capacity decreased at 13% compared to the same period of 2019, Freighters are fully utilized and still waiting for belly (passengers) recovery.
Economy prognosis: The Purchase Manager Index (PMI) hints a strong airfreight demand for the upcoming months, while Inventory to sales numbers in North America is low historically (like 2010 levels), which shows that demand for goods will continue for the next few months as well.
China: the Chinese authorities imposing several severe restrictions, and this currently causing a lot of issues for airfreight cargo.
China: Less capacity available due to ZERO covid policy, increase in demand will generate rate increases higher than expected.

Best Regards,

Yahalomit Barzilay
Senior Director, Freight Forwarding, Air & Sea, Israel