DSV Market update Air & Sea – 12th October 2021

Israel-Local

Maman (airport handling agent ) has a huge backlog which causes long delays ,shipments cannot be located for days (~5-10 days)

Weather

We still have some weather disruption, in the Hong Kong area is expected a Typhoon “Kompasu” and “Lionrock” which will cancel flights and close the port of Hong Kong in the coming days, this will have an impact in already stressed air freight and ocean freight modes.

COVID Update:

There has been some positive cases in Hong Kong airport and as a result, 25% of the airport workforce has been sent home.

By November United Stated will lift travel restrictions for vaccinated travellers and this will mean a re open of flights to Europe, China and India. This will have a positive effect on air cargo capacity.

Impact of power curb in China:

Power rationing began in many places since late Q3-2021 in China. Industry insiders predict the situation could worsen as the winter season draws near, the extent of the policy varies from province to province and also from industry to industry, the most affected areas will be for factories located in South East China: Xiamen and Fuzhou

Ocean ports situation: Congestion problem is a big issue, 12,5% of global capacity is now removed due to congestion, the reversal to full normality stretches at least to the end of 2022, ocean Freight Rates and additional are still in place after the closure of the golden week in China.

Airfreight: We see rates going up from Asia with strong volumes, for the current peak season. Hong Kong airport will be affected in the coming days both for COVID and Typhoon (similar to what happened in Shanghai one month ago).

rates are without control and the focus is on moving the cargo, it is difficult to predict the stabilization of rates in the middle of the peak season, and potential service recovery is extending over Chinese new year on February 2022, and it will extend until the end of 2022.

Ocean freight highlights:

12.5% of the global capacity is now unavailable, vessel delays are keeping rates artificially high with the same volume transported (Los Angeles port reported a drop of 6% of volumes during August 2021 compared to August 2020, this is mainly caused by the port congestion)
New IMO regulations (EEXI) to reduce CO2 emissions for 2023, This will potentially decrease the speed of vessels and it will impact on capacity
Schedule reliability drops to an all-time low in August, current performance globally is 30%, but looking on Asia to North America the reliability is only 10% and 11 days of delay, or two working weeks delayed.

Airfreight highlights;

Global air cargo capacity remained stable across freighters and widebody belly in the last two weeks (31% on Freighters growth and -46% of passenger capacity reduction) compared to 2019.
US Transatlantic widebody belly cargo capacity grew ~55% over the last 20 weeks, reaching 52% of pre-COVID levels. The United States will reopen in November to air travellers from 33 countries including China, India, Brazil and most of Europe