Global air freight market and situation update

Global air freight market and situation update

Aug 26, 2021 | , , , ,

Peak Season for air cargo traditionally arrives in the latter half of September. It’s predictable although always a pain to negotiate and ensure that product, raw materials and components are available for the busy back end of the year, including the traditional retail festive season.

This year air freight has become an essential mode earlier than usual in August. As a result of production delays during the manufacturing process, ocean freight turmoil, airport closures, productivity delays and, of course, COVID-19 impact and regional lockdowns affecting all of the aforementioned. We are seeing a surge in demand and reduction in airline capacity we are experiencing.

Over the last week alone we have experienced  Shanghai Airport – Pudong – operating at 20% capacity due to air crew restrictions resulting in flight cancellations and operational issues with whole cargo terminals shut down and staff having to isolate on a cyclical basis. Dhaka Airport is also suffering from delays, with overwhelming demand for air freight uplift, due to ocean freight failures and lockdown fallout, with the consequences being catastrophic. 

These occurrences are not unique and are being seen throughout the Indian subcontinent, southeast Asia and China, along with many other trade lanes globally, causing instability and unreliability in the critical express air freight market.

Airlines are increasing rates by the day and westbound cargo rates have increased significantly in a week. Export cargo from Europe has also been traumatised by the further reduction in capacity, with carriers having to cancel scheduled cargo flights due to air crew restrictions. 

Passenger driven demand has still not returned and the long-haul market looks unpredictable and doubtful for the rest of the year, resulting in a continued reliance on cargo-only capacity and flights, in the form of pure freighters and passenger converted aircraft. Carrying only cargo on all major routes, from Asia to global destinations. 

Many carriers have withdrawn their capacity agreements and are now quoting daily or weekly rates based on a spot basis only.

And this is in August with four months of the year to unwind and assuming/hoping there is no further disruption to ocean freight services, which seem to be occurring on a regular basis.

We continue to keep our customers and partners updated with developments, which are occurring on an almost daily basis, from and to all regions of the world in relation to air freight services, including charter operations and alternative sea/air and truck/air modes of transport.

If you have urgent and time critical movements please contact Elliot Carlile or Grant Liddell for immediate advice and a solution that will deliver based on transit versus cost. 

We anticipate a very hectic ‘peak period’, but will always share and recommend the best fit to ensure your supply chains and business continue to function.

Please contact us for the latest updates, if we have not proactively shared any specific requirements over the coming weeks and months. We are continually reviewing the platforms and initiatives that we roll out to customers, to ensure your goods are in the right place at the right time. Always.

Global vessel congestion and schedule delays grows further after Ningbo closure

Global vessel congestion and schedule delays grows further after Ningbo closure

Aug 25, 2021 | , , ,

Just two weeks since the Ningbo-Zhoushan containers terminal closed after a worker tested positive for COVID-19 and container port congestion has spread across China and many other regions.

Data from consultancy eeSea highlights how global container port congestion has grown over the past fortnight in China and neighbouring nations, yet has momentarily eased in Europe. Not unsurprising as there is a lag between departure and arrival of vessels, as they transit from Asia to Europe, so we may see impacts in coming weeks, as delayed vessels begin to arrive.

The maps show congestion today versus two weeks ago, with 48 container ships currently waiting at Ningbo-Zhoushan and a percentage of 65% of vessels waiting versus in port.

Shanghai is inching upwards, at 52%, and Yantian (68%), Hong Kong (55%) and Shekou/Chiwan (67%) are also on an upwards trend. Busan, which is usually quite low, is now at 70%, with 14 vessels waiting outside.

The average number of weekly port calls to Ningbo fell 22% from 188 container vessels to 146 in the first week of closure, but the total vessel capacity calling at the port only dropped 7.8%, because the other four terminals at the port absorbed the inbound and outbound container traffic redirected from Meishan.

Outside of east Asia, there has yet to be a major spill over from the Ningbo closure into other Asian ports. The port authority in Ningbo-Zhoushan is slowly implementing a reopening of its Meishan terminal, a facility which accounts for around 20% of the approximate 30m teu that pass through the port annually.

Throughput will be increased in phases to reduce the backlog of containers, with resumption of container gate operations due to start yesterday and a full reopening scheduled for the 1st September. This will take time to filter through into carrier schedules and reliability and will not be an immediate ‘fix’.

Chinese authorities have been stringent with COVID testing. Many ports (and airports) are requiring nasal swab tests for entire crews, forcing vessels to remain outside the harbour until negative results are confirmed. And many ports are requiring vessels to quarantine for two to four weeks if they were previously berthed in India, where the delta variant surged during the summer and continues to have an impact throughout Asia.

The risk of a coronavirus outbreak at Chittagong port is rising as the presence of the deadly virus was detected in the crews of two vessels in the last week and a crew member of the 11,000TEU YM TRAVEL, was tested positive for COVID-19, resulting to schedule delays for its transpacific service. This is in a country that is only just coming out of strict government  lockdowns and has huge issues with congestion already at the port, which is also having a huge impact on aviation from Dhaka globally as ocean freight delays prevail.

India’s worst-ever sea freight capacity crunch has led to skyrocketing freight rates and a sold-out spot market to Oceania, West Africa, North and South America, as well as Europe. Carriers have announced a number of general rate increases and peak season surcharges (PSSs) which have seen freight rates double since July.

Retailers and other importers are increasingly trying to switch from ocean to air transport to make up for huge production slowdowns in Vietnam due to COVID-19, with air freight rates rapidly escalating because of the spike in demand.

The shift to air follows the Vietnamese authorities response to rising numbers of COVID-19 cases in the south, in extending by a month stringent controls on movement that have crippled factory production and sharply reduced freight activity at ports and airports. Many factories remain closed.

According to the Vietnam Textile and Apparel Association, nearly 90% of the industry’s supply chain has been significantly impacted by the partial lockdowns, with up to 80% of garment and textile companies in the southern provinces completely halting production. In the north, about 20% to 30% of the textile and apparel suppliers have halted production.

COVID-19 is also affecting Cambodia, which is complicating land-air shipments via Saigon and Bangkok. The rate from Thailand’s capital has more than doubled from pre-pandemic norms.

Our commercial and operations teams work closely with our partners across Asia and while we expect the situation in Ningbo and surrounding ports will improve, as Meidong reopens properly, we will continue to assess its impact on a shipment by shipment basis.

For urgent and must have shipments from Asia, we have access to freighter capacity from our Sea/Air hub in Singapore and can move consignments of up to 200cbm per flight to Europe as an alternative to restricted pure air freight services from many origins.

If you have any questions, concerns, or would like any further information regarding any of the issues raised here, please don’t hesitate to contact Elliot Carlile or Grant Liddell.

Ningbo container terminal to reopen

Ningbo container terminal to reopen

Aug 17, 2021 | , , ,

Ningbo Meidong Container Terminal will open tomorrow, having suspended all operations early last Wednesday morning after a port worker tested positive for COVID-19. Local sources now advise that the Meishan Island container terminal will restart operations from 18th August.

Despite the Ningbo port authority claiming that it had been able to work at 90% capacity in recent days, many ships are switching to different terminals and AIS data shows around 50 container vessels waiting at the outer Zhoushan anchorage.

Operations were suspended after a 34-year-old worker at the Ningbo Meidong Container Terminal (part of Ningbo’s Meishan bonded area) tested positive for COVID. More than 90,000 people have been tested over the past week with no further positive cases reported.

We are receiving (as yet unconfirmed) news that Ningbo’s shuttered Meidong container terminal will start a phased reopening tomorrow.

To clear the backlog of cargo, no new cargo will be accepted until the 25th August, with normal operations resuming from the 1st September.

The timeline is similar to the way Yantian reopened in June and will be in accordance with China’s COVID-19 policies.

Though significant, the disruption at Ningbo is significantly less than that which followed the Yantian closure, for around a month in May.

Port authorities claim that container volumes at Ningbo-Zhoushan port averaged 77,000 TEU a day between Wednesday and Friday last week, equivalent to 90% of the daily average in July.

The Meidong facility — also known as the Meishan Island International Container Terminal (MSICT) — handled around 22% of Ningbo-Zhoushan’s total throughput of 28.7 million TEU last year.

We are now on day seven of the closure and ships are being diverted to other terminals in Ningbo and other ports, including Shanghai, which are already running at full capacity, in the aftermath of Typhoon In-fa, with some imposing restrictions limiting the number of people and containers entering port areas.

Gate-in for export containers at other Ningbo terminals is limited to two days before a vessel’s estimated time of arrival, although entry to the container yard can be up to three or four days depending on the situation.

The closure of the Ningbo Meidong terminal is likely to lead to problems with trucking as well, as average wait times are currently 2-4 days and you can add another day onto dwell time for every day Ningbo Meishan terminal is closed.

Our commercial and operations teams work closely with our partners across Asia and while we expect the situation in Ningbo will improve swiftly, after Meidong reopens, we will continue to assess its impact on a shipment by shipment basis.

For urgent and must have shipments from Asia, we have access to freighter capacity from our Sea/Air hub in Singapore and can move consignments of up to 200cbm per flight to Europe.

If you have any questions, concerns, or would like any further information regarding any of the issues raised here, please don’t hesitate to contact Elliot Carlile or Grant Liddell.

COVID-19: The critical worker crisis

COVID-19: The critical worker crisis

Aug 12, 2021 | , , ,

In an effort to protect supply chains and essential services the government released a list of sectors where fully vaccinated workers may be exempt from isolation if they are told to quarantine after coming into close contact with a positive COVID-19 case. Many of these are within the supply chain and global logistics platforms that are essential to businesses functioning successfully.

Fully vaccinated adults will no longer have to self isolate if they are ‘pinged’ from 7th August in Wales; 9th August in Scotland; and 16th August in England.

Instead, they will be advised to take a PCR ( if you have ever wondered what it stands for – polymerase chain reaction) test and can stop self-isolating if the result is negative. If the result is positive, they will need to self-isolate just like anyone else.

Until the 16th of August in England employers providing the critical services listed below can request a self-isolating exemption for named employees who are fully vaccinated.

  • Energy
  • Civil nuclear
  • Digital infrastructure
  • Food production and supply
  • Waste
  • Water
  • Veterinary medicines
  • Essential chemicals
  • Essential transport
  • Medicines and medical devices
  • Clinical consumable supplies
  • Emergency services
  • Border control
  • Essential defence outputs
  • Local government

Supermarket depot workers and food manufacturers will be exempt whatever their vaccination status and this is being extended to transport and freight workers, plus those working in the selected critical sectors.

Despite the government’s moves supply chains are missing critical personnel at every point, including ports, freight terminals, railheads and shipper warehouses, not to mention the continuing HGV driver crisis.

So far the government has ignored pleas to relax Brexit immigration rules to allow foreign drivers to return on a temporary basis and calls for the MoD to provide drivers is unlikely to have any impact on the situation. The government’s moves to increase working hours and streamline driver testing systems, to aid recruitment, will only have a marginal impact.

With the shortfall of drivers already standing at 100,000, any personnel loss through illness, self-isolation or move to higher-paying retailers is having a profound impact on haulier operations across the country and particularly around key ports and airports.

After years of underpayment and poor working conditions, a job as an HGV driver has become more attractive in recent months as a growing number of firms offer up-front bonuses and wage uplifts in an effort to attract and retain staff, though shippers are increasingly picking up the tab, through driver surcharges.

All the signs are that we are heading for worsening disruption, as drivers taking holidays are added to COVID-19 shortfalls, without any drivers to cover.

Road transport cannot be avoided, as part of the movement of goods, with drivers critical for container movements, international and domestic haulage.

Metro work with a number of reliable, selected long-term haulage and rail partners across the UK, to give us access to the widest pool of equipment and driver resource. 

We frequently audit and manage our associated partners’ standards and ensure the safety of all individuals within our platforms are always compliant with the current regulations and legislation.

To learn more, or to discuss your road transport requirements, please contact Elliot Carlile or Grant Liddell (or Simon Balfe who leads our UK multimodal transport operations) who can talk you through the options.

Category: Coronavirus

China | Coronavirus | Sea | Supply Chain

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