Newsletter- January 7, 2022
AIR FREIGHT UPDATES
Russia Takes Control Of Almaty Airport Following Unrest
After a request for help with what he is calling ‘foreign-trained terrorists’, states that are part of the Collective Security Treaty Organization have sent forces to the aid of Kazakhstan’s President Tokayev. Russia confirmed on Friday that its troops had taken full control of Almaty International Airport. Meanwhile, others claim the protests in Kazakhstan are part of a plot to destabilize the broader region. Read more here.
Airfreight rates end the year on a high
Airfreight rates on major trade lanes ended the year on a high as supply chains remained under pressure.
The latest figures from the Baltic Exchange Airfreight Index (BAI) show that average prices from Hong Kong to North America in December reached $12.72 per kg – their highest level of the year and up by $1.18 per kg on November. Read more here.
OCEAN FREIGHT UPDATES
Shenzhen on alert as more Covid-19 cases crop up
China’s whac-a-mole approach to containing Covid-19 is seeing restrictions rushed in at many more important hubs across the country as the nation struggles to contain more contagious variants spreading.
Two Covid-19 cases in Shenzhen have seen local authorities usher in travel bans making it difficult to leave the city with more mass testing underway today in the city’s Longgang district. Trucker availability at the key southern Chinese box port is likely to be hit by this latest outbreak. Read more here.
FMC Stepping Up Its Scrutiny of Liner Shipping
In the wake of 2021’s tumultuous supply chain disruptions, the Federal Maritime Commission (FMC), the U.S. overseer of liner shipping, has taken a more aggressive stance.
Encouraged by a July 2021 Executive Order from the White House regarding “Competition in the American Economy”, the FMC now has the remit to look closely at anti-competitive practices of the liner carriers- with “demurrage and detention” practices on containers attracting particular scrutiny. Read more here.
Omicron having increasing impact on labour force availability across global supply chains
Congestion has been an issue affecting global supply chains for much of the pandemic, and system-wide labour shortages look set to exacerbate the problem. Business leaders and government health officials are warning that the omicron will increasingly have an impact on labour availability.
Commenting on this issue on LinkedIn, Lars Jensen, CEO of liner consultancy Vespucci Maritime, said: “With the new wave of Covid more people get tested positive. This means more people have to call in sick from work – and that of course goes for all kinds of jobs – including port workers, truck drivers, warehouse staff etc.” Read more here.
‘Stick or twist’ – do shippers play the spot market or go for fixed-rate contracts?
Volume shippers offered new long-term fixed-rate contracts by container lines are, nevertheless, still keen to keep a foot in the door of the spot market.
The extreme volatility of the spot market saw many shippers get their fingers badly burned over the past 18 months as rates were turbocharged by supply constraints and strong consumer demand. Read more here.
Ningbo port remains open, but land transportation becomes tricky
Ningbo-Zhoushan, China’s second busiest container port is still open for business as the country battles another wave of Covid-19 infections, but the drive to keep out the disease has slowed trucking logistics.
Bunkering sources told Container News that, “Only Zhenhai and Beilun (districts in Ningbo) have been locked down. The port itself is still functioning, but people working in the port or going to the port must produce a negative Covid-19 test result so that is slowing things down.” Read more here.