Transport Update 20th December

Asia → North America (Transpacific Eastbound)

Rates

• Container spot rates are edging up again across most trade lanes, with a big spike expected in January ahead of the Chinese New Year holiday.
  • The Drewry’s World Container Index (WCI) saw Asia-US components jump by 5% to the west coast, to $10,138 per 40ft, and by 4% for east coast ports, to $13,118 per 40ft. 
  • The Freightos Baltic Index (FBX), which includes premium fees, inched up 1% to the west coast, to $14,924 per 40ft, while east coast ports recorded an increase of 2.5%, to $17,195.

Capacity

• The trend in blank sailings in 2021 has shown to be fluctuating through the entire year. 
  • Data from Sea-Intelligence shows that blank sailings between Asian and the North American West Coast ports averaged approximately 12 percent of TEU capacity in 2020 versus blank sailings of an expected average of nearly 20 percent of TEU capacityin 2021.
• Since week 41, the carriers have consistently been blanking more than 20 percent of TEU capacity on these routes and it is expected to remain constant through the end of the year.
• This is because of several factors, including the demand boom in North America and port congestion. As a result, carriers are struggling to meet their weekly vessel departure obligations, resulting in vessel delays, rolled schedules and blank sailings.

Ports

• Over 100 container ships are waiting for a berth at Los Angeles and Long Beach.
  • The typical pre-pandemic fortnight’s passage for ships transiting from Asia to North America is now soaking up enormous capacity with some voyages taking longer than 45 days to berth.
  • Last month, American authorities pushed the vessel parking lot away from the California coast, asking ships to idle some 150 miles from the coastline. As a result, the volume of backed up vessels has continued to grow.
  • The latest data shows that there are 30 ships anchored or loitering inside Southern California waters plus 71 slow-speed-steaming or loitering outside the designated safety and air quality area.
  • However, in preparation for an incoming storm, port authorities have cleared all ships anchored off the ports of Long Beach and LA. 
• San Pedro ports have postponed their container dwell fee for the fifth week in a row. 
  • Implementation of the dwell fees is now on hold until at least December 20th as the ports continue to monitor cargo flow through terminals.
  • The latest update said the two ports have seen a decline of 47% in cargo on docks since the fee was announced on October 25th.
• Forward schedules published by MSC show that the shipping line will soon expand the port coverage of some of its Far East – North America services.
  • This change will happen independent of the 2M Alliance.
  • MSC will start serving the US Gulf with its North Vietnam – Central China – US East Coast loop ‘Santana’, adding Houston to this loop. 
  • This will call at Haiphong, Shanghai, Ningbo, Houston, Charleston, New York, Haiphong.
  • MSC will also add calls at Busan and at Portland to the rotation of its ‘Mustang’ service, which so far used to be a pure Shanghai – Los Angeles shuttle.
  • The revised rotation will see calls at Shanghai, Busan, Portland, Los Angeles, Shanghai.

Asia → Europe (Far East Westbound)

Rates

• From Asia to North Europe, Drewry’s World Container Index (WCI) was flat, at $13,564 per 40ft 
• The Freightos Baltic Index (FBX) increased by 1%, to $14,345 per 40ft
• The Xeneta (XSI-C) Index improved by 3%, to $14,443 per 40ft.
• Several carriers are now reported to be offering forwarders and NVOCCs Asia-North Europe rates with a validity of just two weeks. These carriers are declining to sign any short-term contracts before CNY in February.

Equipment

• See below

Ports

• The 2M shipping alliance has made the temporary decision to consolidate the Asia-North Europe port calls in the New Year. 
• Maersk and MSC have said that from January, the AE1/Shogun service will omit the call at Felixstowe and the AE55/Griffin loop would no longer call at Rotterdam.
• This is due to exceptional waiting time and congestion faced in North Europe. By reducing calls, the carriers hope to mitigate potential disruptions across the network.

Air

Asia 

 Central China to USA and Europe

• The market has slowed a little for the US and Europe.
• Due to the run up before Christmas, there is less cargo than before. 

• • Covid restrictions are still in place at PVG Airport.
    • Over 40% of cargo flights are cancelled
    • Terminals are at 50% in terms of labour resources
  • Rates from NGB to USA and Europe have decreased on both lanes. 

• Bookings should also be made in advance and rates and space need to be checked with your carrier on a case-by-case basis. 

North China to USA and Europe

• The situation is critical this week from TSN to the USA and Europe. Customers will need to check with their carriers on a case-by-case basis as space is already fully booked on December 28/29th. 
• Asiana Airlines are not accepting bookings for the US but are accepting them to Europe based on cargo details. 

• • Korean Air is accepting bookings based on cargo details to both destinations. 
  • Dense cargos can apply for spot rates. These will come at a high rate including a longer transit time. 

• Rates from PEK Airport have decreased compared to last week to the USA and Europe. 
  • Space is getting tight due to the last week before Christmas and Covid testing. 

• It is advisable to confirm rates and space 3-4 days in advance. 
• Bookings should also be made in advance and rates and space need to be checked with your carrier on a case-by-case basis.

South China to USA and Europe

• The air rate has reduced slightly from CAN airport to the USA and Europe. 
• At SZX Airport, rates for flights to the USA have decreased; however, they have remained stable and high for those to Europe. 
• Space to the USA and Europe from XMN Airport is tight. Rates have decreased for both destinations. 
• Bookings should also be made in advance and rates and space need to be checked with your carrier on a case-by-case basis. 

Americas

• FedEx Express recently completed a major expansion of its air cargo hub located at Miami International Airport.
  • The US $72.2m expansion will increase capacity and capabilities at the company’s Americas gateway, which connects the US and Canada to Latin America and the Caribbean. 
• United Express has taken an equity stake in hydrogen-electric engine developer ZeroAvia, giving them the ability to purchase ZA2000-RJ engines. 
  • Therefore, 100 zero-emission, 100% hydrogen-electric engines could be used on United Express regional aircraft by 2028. 
  • This will make United the largest airline to invest in zero-emission, hydrogen-electric engines for regional aircraft with belly hold capacity. 

Europe/UK

• Atran Airlines has added another flight between China and Europe utilising a B737 freighter.
  • The Russian carrier will operate a weekly flight between Shenzhen and Cologne-Bonn using a B737-800BCF. This is an aircraft used for regional and national operations given its 23 tonne capacity and range. 
• European cargo airline, Cargolux, will deploy IBS Software’s iCargo SaaS solution to improve services and efficiency, which will also streamline customer experience.
  • Cargolux is currently going through a digital transformation and the aim of implementing iCargo is to innovate and implement a system to help coordinate with their partners. 
• Air Belgium is looking to expand in the air cargo market through the addition of B747-8 freighter aircraft operations.
  • The airline has started its recruitment of cockpit positions for captains and first officers who are qualified to fly. 
  • The airline already operates four freighter aircrafts on behalf of CMA CGM.

Road and Rail