Newsletter – April 8, 2021
AIR FREIGHT UPDATES
Transpac rates rise while supply chains brace for Ever Given impact
Air cargo rates on the transpacific trade lane picked up last week while capacity remains tight and supply chains brace for the impact of the Suez Canal blockage.
The latest statistics from Baltic Exchange Air Freight Index (BAI) show that last week prices from Hong Kong to North America increased by 20.5% on a week earlier to $7.63 per kg. Read more here.
Options for shippers narrow as air cargo charter prices hit new heights
Supply chain shocks aside, the last two weeks of March saw air freight stabilise, with just single digit fluctuations in rates.
But, as anticipated, forwarders have reported sky-high charter rates in response to the Ever Given Suez crisis.
“Charter prices are going through the roof for the coming two weeks, capacity seems scarce and, indeed, some shippers have reached out to us for alternative solutions via air,” said one forwarder specialising in Asia-Europe. Read more here (login required).
Air cargo demand up nine percent in February
Air cargo demand in February continued to outperform pre-COVID levels with demand up nine percent over 2019, according to the latest figures released by The International Air Transport Association (IATA).
Demand also showed strong month-on-month growth over January 2021 levels. Volumes have now returned to the 2018 levels seen before to the US-China trade war. Read more here.
OCEAN FREIGHT UPDATES
Irate customers rush for capacity as Maersk suspends contract bookings
DANISH shipping giant Maersk’s decision to ‘temporarily suspend’ spot and short-term contract bookings from Asia following the Suez Canal blockage have left forwarders and NVOCCs scrambling for alternatives, reports The Loadstar of UK.
The carrier said it estimated a loss of capacity across its network of up to 30 per cent ‘over multiple weeks’, in addition to equipment shortages in Asia. Read more here.
FMC vows to get to the bottom of the ongoing container crunch hammering US supply chains
The Federal Maritime Commission, America’s shipping regulator, met virtually and in closed session yesterday to discuss developments in the ongoing Fact Finding 29 investigation of challenges to the freight delivery system and possible Shipping Act violations, and to receive a briefing on the agency’s monitoring activities of ocean carrier alliances. Read more here.
Q4 20 most profitable in container shipping history, but 2021 will be better
Ocean carriers enjoyed their best quarter in container shipping history in the final three months of 2020, but are expected to have significantly topped that record in the first quarter of this year.
According to New York-based Blue Alpha Capital, fourth-quarter net earnings for the 11 carriers that report their financials came in at $5.8bn, but assuming that the non-reporting operators, such as MSC, achieved similar results, based on the average for the 11 lines the consultancy estimated the cumulative net … Read more here (login required).
GROUND AND RAIL FREIGHT UPDATES
STB to require ‘certain minimum information’ on demurrage invoices
The Surface Transportation Board (STB) plans to adopt a final rule on what information should be included in demurrage-related billing statements from the Class I railroads. The rule seeks to address some of the transparency concerns raised by rail shippers.
The rule, published in the Federal Register on Tuesday, will be effective on Oct. 6. It requires Class I carriers to “include certain minimum information on or with demurrage invoices and provide machine-readable access to the minimum information.” Read more here.
Forwarders should move quickly on Ever Given GA, but legal wrangle looms
The British International Freight Association (BIFA) has urged forwarders with cargo on board the Ever Given to begin General Average (GA) procedures with their shippers.
The vessel’s owner declared GA last Thursday.
Robert Keen, director general of BIFA, said: “When our members receive notification that a General Average has been declared for a vessel, whatever the position, their first action must be to give the importer immediate notice. Read more here (login required).
CANADA BUSINESS – GOVERNMENT UPDATES
Canada May Run Out of Warehouse Space This Year
Canada is in danger of running out of warehouse space by the end of the year, thanks to the boom in e-commerce sparked by the pandemic.
While a near-record 26.1 million square feet of logistics real estate is under construction, much of it is already leased, according to a report released April 6 by commercial-property brokerage CBRE Ltd. And with vacancy rates for existing warehouses at historic lows, it soon may become nearly impossible for businesses to find places to store their goods. Read more here.
INTERNATIONAL BUSINESS – GOVERNMENT UPDATES
Why shortages of a $1 chip sparked crisis in global economy
To understand why the $450 billion semiconductor industry has lurched into crisis, a helpful place to start is a one-dollar part called a display driver.
Hundreds of different kinds of chips make up the global silicon industry, with the flashiest ones from Qualcomm Inc. and Intel Corp. going for $100 apiece to more than $1,000. Those run powerful computers or the shiny smartphone in your pocket. A display driver chip is mundane by contrast: Its sole purpose is to convey basic instructions for illuminating the screen on your phone, monitor or navigation system. Read more here.