DSV MARKET UPDATE – MARCH 2024

Dear customers,

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

DSV Israel

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.
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 . In March we see reduction on ocean freight.

Airfreight

Some airlines have returned to operate the flights into/from IL in March – (United Air India   Air France,  Air Europa )

few more announced that they will resume their flights To/From Israel in Apr-2024  ( British ,Air Canada, Delta )

Some of the International airlines are postponing resuming their flights to/from Israel due to the war.

GENERAL UPDATE

On the Ocean freight we start to see a 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.

For Airfreight 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.

• China’s ‘Two Sessions’ Doesn’t Show Clear Path to Recovery China’s first major policy meeting of the year wrapped up on March. Anticipation heading into the top policymakers’ gatherings, known as the “Two Sessions,” was high with expectations for a stronger stimulus to jump-start recovery in China’s slowing economy with the property sector still in a slump and slow consumption.
• USA: Inflation Picks Up to 3.2%, Slightly Stronger Than Expected Consumer prices rose 3.2% in February from a year earlier, the Labor Department said Tuesday, up slightly from economists’ expectations of 3.1%.
• European Central Bank Holds Rates as Central Bankers Weigh Timing of Cuts, Policymakers across developed economies are balancing the risk of cutting too soon against signs of slowing inflation.

Red Sea Attacks

• Rubymar’s sinking poses ‘major environmental crisis’ in the Red Sea
• Fire on MSC container ship targeted by twin Houthi rocket strike The Liberian-flagged 2,169-teu MSC Sky II (built 1999) was damaged in the attack but no crew members were believed to be injured.
• Overall impact of capacity on Red Sea attacks, As the first data we see a 7% global capacity impact by Houthis attacks,  Red Sea crisis has absorbed over 1.2m of containership capacity
• Small Initial effects of Red Sea Blockage in global supply chains
• Pirates plan more attacks as abducted Bangladeshi bulk carrier moors off Somalia.
• New services announced by carriers to cover Red-Sea destinations.

OCEAN:   General reduction of rates after Chinese New Year, the effect of adding additional capacity is working and future pricing will depend on demand behavior.

AIR:          We see some charter cancelations out of Asia due to operational issues. Bangladesh and India are heavy affected, and we see continuous rate increases.

Ocean freight highlights:

• 2024 Underlying Market Dynamic: Significant Oversupply with 120 Large Capacity Newbuilds Expected this Year.
• Ocean Alliance deal extended to 2032 (CMA-CGM, COSCO, OOCL and Evergreen will keep cooperation, as a surprise after the new Gemini (Maersk, Hapag Lloyd alliance was announced)
• As per Xeneta, Emission Trading System (ETS) surcharges has been registered in shippers’ contracts.
• Increase number of slots in the Panama Locks, from 24 to 27 potential daily transits.
• Panama Canal transits still falling – but no supply chain crisis in sight.
• US container imports robust in February, Adjusting for Lunar New Year by comparing only the first 15 days of February, the annual U.S. import growth rate stands at approximately 13%,
• Container shipping demand from China to Mexico increased by 59.7% in January 2024,   the strength in trade between China and Mexico has been building, with the annual growth rate in 2023 standing at 34.8% compared to just 3.5% in 2022.
• US container imports robust in February

• Airfreight highlights:

• Global international air cargo capacity was up +9.8%(vs. 2019) between February 5th-March 3rd in 2024.
• Global international air cargo capacity has decreased by -4.9% in the last four weeks (vs four weeks prior).
• Strong differences in integrator ATK capacity growth in 2024YTD compared to same period in 2023 per trade lane.
• International widebody belly capacity shows significant increase on Transpacific and Asia-Europe trade lanes.
• Air rates soar as Bangladesh garment exporters switch from ocean
• A ‘tsunami of e-commerce growth’ on course for air cargo