DSV MARKET UPDATE – FEBRUARY 2024

Please find attached the market update for February 2024 for Air & Sea

LOCAL UPDATE

Ocean

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.

As a results of this situation:

• Increase of lead times, for 20 – 25 days depending on origin to Haifa/Ashdod ports should be added to future plannings.
• Ocean freight rates increased; all shipping lines implemented Surcharges in addition to the PSS.
• Lack of capacity & equipment availability, due to the changes in the routing of the vessels.
• Explore alternative routes and modes of transport: Sea to Air, or several multimodal options offered.
• Shipments switched from Ocean to Air to meet the lead time.

Airfreight

The Lufthansa Group (Swiss & Austrian) and Tarom airlines, resumed their flights to/From Israel, since the beginning of January 2024. Air France, Feb – 2024.
Some of the International airlines are postponing resuming their flights To/From Israel due to the war.
A few airlines have announced that they will resume their flights To/From Israel (Air India – Mar- 2024 , British ,Air Canada , Emirates , Delta – Apr 2024)
 

General update

• China, Deflation Tightens Its Grip Deflation is becoming more entrenched in China, with consumer prices falling in January at their steepest pace in more than 14 years.
• The U.S. trade deficit with China felt last year to its lowest in over a decade.
• US: Inflation for January at 3.1% Reflects Stubborn Pricing Pressure
• German Inflation Falls Again, Likely Pushing ECB Closer to Rate Cuts

Red Sea Attacks

• Red Sea blockade ripples container volumes though Suez Canal
• CMA CGM reroutes from Red Sea to Cape due to Houthi threat we are also seeing diversions of tanker vessels and LNG vessels.
• US launches more strikes against Houthis in Yemen
• Attacks on Red Sea shipping might affect inflation.

OCEAN: Rates are normalizing now that Chinese New Year has started, and carriers are adding capacity and normalizing schedules through Cape of Good Hope

AIR: Few Oceans to Air conversions due to cargo delays caused by red sea attacks, and we see a normal seasonality effect with the start of Chinese New Year.

Ocean freight highlights:

• Formation of the Gemini Cooperation between Maersk and Hapag-Lloyd a new era, with future changes to the industry
• Water level projections threaten future Panama Canal transits
• Global market: It is expected an oversupply market, it also depends on how long the Res Sea Crisis lasts
• US: Despite dim outlook, January imports grew at fastest pace in 7 years
• Container freight market has entered a new era of volatility
•  Bunker gap between Low Sulfur and standard IFO increases due to Red Sea effect

Airfreight highlights:

• Air cargo capacity and demand continue to grow in Q4 2023, demand-supply balance still out of sync
• The impact of the Red Sea attacks on air freight demand have yet to materialize
• Global international air cargo capacity was up +10.3%(vs. 2019) between January 1st-January 28th in 2024
• The effect of Chinese New Year on air cargo capacity out of China & Hong Kong has returned over the past years
• Mostly major Asian and Gulf airports top the ranks of growth in international air cargo capacity over 2023
• Transpacific and Asia-Europe yields rise in the last weeks of January due to Red Sea crisis and Chinese New Year