Freight Market Update: Air & Ocean [January 2022]

January 2022 Market Updates

Freight Market Updates January 2021

The Topic of the Month

MSC has eclipsed Maersk as the world’s largest container line in 2022 

According to the Alphaliner, the Mediterranean Shipping Company (MSC) has topped Denmark’s Maersk to become the ’s top shipping line. Last year, MSC paid $50.5 million for the ship. MSC’s fleet can now handle 4.3 million conventional 20 ft containers, which is around 2,000 more than Maersk. MSC and Maersk now each hold a 17 percent market share in container shipping, ahead of CMA CGM, COSCO, and Hapag-Lloyd. 

scrubber fitted capacity (teu) by carrier and proportion of fleet

MSC is anticipated to consolidate its position at the top in 2022 and beyond as it begins to obtain a further container ship order book of 999,808 TEUs, by far the biggest of all shipping lines. MSC formally toppled Maersk’s decades-long reign as the world’s largest container carrier when the 4,992 TEU-capacity 

MSC is anticipated to consolidate its position at the top in 2022

Ocean Freight Market Updates January 2022 United Arab Emirates

Outbound Ocean     

Supplier delivery times PMIS no change

Keys

SignMeaning
++Strong Increase
+Moderate Increase
=No Changes
Moderate Decline
Strong Decline

ME – North America     

One line Status: Rate hikes were enforced for the first part of January, with some exceeding GRI levels experienced over the summer. Space on the West Coast of the United States, Houston, and Savannah is restricted to entirely unavailable, and there is an equipment deficit out of Turkey. There is little capacity for interior-point intermodal reservations; carriers prioritize port-to-port freight. Congestion at LA/LB continues to worsen, resulting in port omissions and a reduction in available capacity as 120+ vessels wait for a chance to berth before continuing to other destination ports or returning to origin for subsequent sailings. Because of the extreme congestion at LA/LB, ocean carriers are restricting bookings for local delivery, preferring Inland Point Intermodal (IPI) cargo through the PSW gateway. Shippers with urgent goods or those looking to replenish depleted inventory are ready to pay a premium for limited space. 

Local Rates  Rates remain high, and the premium market for pre-CNY sailings is robust, heading up premium rates. (++)   
Local Space – Extremely Critical (–)     
Local Capacity/Equipment –  Limited / Undercapacity (-)     
Notes Bookings need to be placed a month ago in advance.    

ME – Europe    

One line Status: Space and equipment shortages remain as market demand constantly outstrips supply as rates remain extremely high for an extensive period. Due to numerous blank sailings and port omissions, space and equipment remain extremely limited. Carriers are overstressed and are restricting booking acceptance or rolling shipments. Schedule dependability is very poor due to continual vessel delays and shifts, and delays for pre-CNY sailings will have a substantial influence on the post-CNY period.  

Local Rates – Rates remain at an all-time high. They have, however, remained constant throughout November and  December 2021. Some slight increases are expected for December in the lead-up to the Chinese New Year period and due to blank sailing schedules. (+)  
Local Space  Extremely Critical (–)   
Local CapacityEquipment  Available (-/=)   
Notes –   Take planning for a month     

ME – Africa     

One line status –Transshipment routes are experiencing delays, 20′ standard heavy cargo is being limited in general. East Africa’s space is limited due to schedule delays and congestion, South Africa’s space is still limited, and West Africa’s space is improving. Month over month, capacity and spot pricing remain unchanged. 

Local Rates – Prices are on a general higher (+)      
Local Space – Critical and low for East Africa, while relevantly at ease for South and West Africa (-)      
Local Capacity/Equipment – available (+)     
Notes – Only bookings made at least 3-4 weeks in advance  

ME- Mediterranean MED      

One line Status –Rates are still increasing. Space only available for booking 2-3 weeks in advance Lightweight cargo is preferred by carriers.    

Local Rates – Prices are on a general increase (+)       
Local Space – Limited but at a premium (-)     
Local Capacity/ Equipment  – Available      

ME – ISC (Intra-Gulf)    

One line Status — Because space is generally available, carriers focus on returning equipment from Asia for local exports. Turkey is experiencing a shortage of equipment. The United Arab Emirates has a shortage of 20ST. 

Local Rates  Price is on a general increase (+)     
Local space –  available (=)     
Local capacity/ Equipment – available     
Notes  Reservations must be made 2-3 weeks ahead to secure    

ME – Far East Asia      

One line status– The Space is relatively open. There are several challenges with equipment availability, notably with 20ST and some fluctuation in the rates available across the market. Spot rates are rising month after month. 

Local Rates – Price is on a general increase (+)      
Local Space – Limited Space (-)     
Local Capacity/Equipment – available (=)     
Notes    Reservations must be made 2-3 weeks ahead to secure    

ME – China     

One line status  Looking ahead to 2022, market conditions are expected to persist at least through Q1 – with significant demand around the Chinese New Year. The major public holiday in APAC is on February 1st, 2022, however, we anticipate capacity challenges in the weeks after – since manufacturing and companies require several weeks to return to full output after the celebrations. A fresh Covid-19(Omicron) wave in the country has caused a port personnel shortage, which will have ramifications for the upcoming Holiday season. 

Local Rates – Price are on a general increase (++)     
Local Space – Extremely Critical (–)     
Local Capacity/Equipment – available (-/=)     
Notes    Reservations must be made 2-3 weeks ahead to secure    

ME – Oceanic    

One line status- Carriers are imposing weight restrictions per Twenty-foot Equivalent Unit, decreasing total capacity. Congestion at South East Asian transshipment ports is generating several weeks of transit delays. Spot rates are rising month over month. 

Local Rates – (+)    
Local Space – (-/=)      
Local Capacity/Equipment – (-/=)      
Notes    Reservations must be made  at least 4 weeks ahead to secure  

ME – Latin America      

One line status Carrier alternatives are confined to the East and West Coasts of South America, and premium pricing levels are typical. Congestion at transshipment ports 

Local Rates Prices are on a general increase (++)     
Local Space – Very tight (–)     
Local Capacity/Equipment – Available (-/=)      
Notes    Reservations must be made  at least 4 weeks ahead to secure    

Inbound Ocean market update for the United Arab Emirates     

Number of calls by weekly far East-North Europe's Loops

North America 

One line status- For US West Coast POLs, vessel arrivals and available capacity are flexible. The availability of US East Coast capacity has increased; nevertheless, schedule integrity has deteriorated as a result of void sailings and delays in schedules, posing considerable issues with advertised earliest return dates and vessel cut-offs at the port. Due to high congestion at transshipment hubs, certain carriers are stopping service to the Middle East on the United States’ West Coast. Port congestion, frequent empty sailings and port omissions, limited total capacity, and more viable choices from the East Coast. 

Local Rates – Rates have been increased in January 2022. (+)     
Local Space – Extremely critical in US port LA/LB. The US East Coast is showing signs of improvements in available spaces. In the US Gulf space has increased with capacity more readily available   (–)   
Local Capacity/Equipment – Deficits on containers and chassis are still plaguing Inland Point Intermodal (IPI) origins. Availability for standard equipment at ports has not been an issue, but any special equipment is hard to come by. (-)   
Notes    Place bookings 4 to 6 weeks in advance to secure your equipment, trucking, and vessel space.    

AsiaPacific      

One line Status In Asia, space is scarce, and liners are unable to fill capacity shortages as assets are diverted to other trades. Demand is projected to rise, Chinese New Year vacation, continued limited service capacity, and carrier booking acceptance in Oceanic / Australian ports. 

Local Rates –  increased (++)     
Local Space – Critical (-)     
Local Capacity/Equipment – Under capacity (-)      
Notes    Book 2-3 week before   

Europe     

One line status – Equipment and dray power shortages are worsening in the inland ex-UK, Italy, Spain, and Germany. Although space is relatively open, delays at South East Asian transshipment ports persist. 

Local Rates – Rate slight increase (+/=)      
Local Space- Critical  (-/=)      
Local Capacity/Equipment– (=)     
Notes    Book 2-3 weeks before. Shortage of 20’ft containers 

Latin America     

One line status –Capacity is limited, although there are some space options. Monthly capacity and spot rates are unchanged. 

Local Rates – Rate increase (+)      
Local Space – Critical (-)      
Local Capacity/Equipment – (-/=)     
Notes    Book 2-3 weeks before   

Indian SubContinent (ISC)     

One line status- Empty equipment and uneven or blanked sailing schedules will continue to be an issue for ISC exporters in the near future.   

Local Rates– Rate increase (+)     
Local Space-  Critical (-/=)     
Local Capacity/Equipment – Limited (-)     

Notes    Book 2 week ago, Shortage of 20’ft containers 

Air Freight Market Updates January 2022 for the United Arab Emirates      

Global Volume development and Regional volume development

Air Freight Demand  – The surge in demand is still being seen in various industries, including high-tech, automotive, and pharmaceuticals. E-commerce continues to contribute to high levels of air demand. Cargo demand will continue robust over the Christmas shopping season, as will new tech product releases. The emergence of Omicron is expected to accelerate PPE movements. PMIs above the 50 mark in key markets imply that volumes will be strong in the next months. As port congestion worsens, there will be a continued switch from ocean to air freight. 

Carrier Capacity –  Capacity remains insufficient to meet present demand. Global capacity is still being impacted and is down -21 percent from November of last year. Belly capacity increased marginally in response to higher vaccines, although it is still -31 percent lower than pre-COVID levels. ASPA capacity is projected to remain limited until the end of the 2022 Beijing Winter Olympics and Chinese New Year Holiday Spring Festival. 

Local Rates – Rates will stay high as we continue to see massive demand growth versus limited capacity. Rates have risen again on October 21. Now +118 percent greater than the baseline in 2019. • Expected to continue high owing to demand vs. capacity gap. Rates were high in September as firms continued to replace supplies via air freight. 

Carrier Rate from Jan to Dec comparison from 2019 to 2020
capacity development by aircraft configuration January 2019 to November 2021
Global Freight Load Factor Development and Regional Freight Load factor Development

The Middle East and Air Carriers ME      

Carriers in the Middle East have seen a large decline in international CTKs, with growth compared pre-crisis levels falling from 9.7 percent in October to 3.4 percent in November. A declining trend in SA(seasonally adjusted) quantities may be emerging, owing in part to the large Middle East-Asian trade route. 

seasonally adjusted CTKS indexd Jan 2020

Asia     

In Taiwan, market demand began out slow, but it is beginning to build up ahead of the Lunar New Year break. Space to SFO is still in high demand. 

In southeast China, After the holiday break, demand ex-Vietnam has decreased marginally, with Trans-Pacific East Bound (TPEB) rates indicating a downward trend. Carriers continue to prefer loose carton shipments over palletized goods. Most Thai firms began work this week. Demand ex-BKK is increasing, although it is still below the previous month’s level. Some airlines have also modestly cut their fares from the previous week. 

After airline crew members tested positive for Covid-19, several flights in the Trans-Pacific East Bound (TPEB) lane ex-South China were canceled in Week 1, with likely extensions into Weeks 2 and 3. Rates in the FarEast West Bound (FEWB) market have reduced this week, and market capacity is generally adequate compared to the previous week. Because of the decline in demand over the holiday season, destination terminal congestion has improved in South China. 

The market has been relatively calm this week, and carriers are anxious for volume. However, owing to Covid concerns in Hong Kong, some cargo may be diverted through North China, resulting in an increase in demand in the second part of January in North China. 

Europe    

Demand remains low, and rates have declined marginally in all North American destinations. We anticipate that slack demand will resume in the following weeks. 

The demand for air travel has escalated to the point that airlines are steadily increasing their flight schedules. The ocean market’s challenges are keeping demand strong, and we should expect some volatility in spot market rates in the near future. 

There have been a few flight cancellations as a result of Omicron, but there is adequate capacity in the market to handle the slack demand. If there is space for a longer transit time, deferred routings where airlines have passenger capacity remain an appealing alternative at a good rate level. 

Exiting the EU, the advice remains the same: book early for the best rates and solutions. Consider sending smaller batches by air cargo, since rates and solutions may be best maximized in this case. There has been no news of congestion at Europe’s main export hubs. 

North America & Latin America      

Omicron has caused several local and international aircraft cancellations and delays in the United States. To accommodate throughput timings and screening requirements, most terminals provide decreased free time for storage and early close-outs for exports. Congestion at European hubs is improving, resulting in a modest decrease in average dwell time at destination. 

Rates to Latam have fallen during the holidays and summer break, but remain higher than average. Rates into Europe and Asia have been constant in recent weeks. Larger shipments from major outgoing gateways might take 2 to 3 days from the time they are booked to the time they are picked up. 

The terminals at LAX/ORD/JFK have decreased the inbound backlog cargo marginally, which has a beneficial impact on the export side. Export demand in the United States has slowed marginally, yet capacity is still manageable. 

Recovery in international Travel will be uneven in 2022 intra-Europe and Europe-NTh America travel will outpace Asia

Local Updates the United Arab Emirates, January 2022    

Local Updates the United Arab Emirates, January 2022    

Logistics News January 2022   

Hapag Lloyd has updated the Marine Fuel Recovery Surcharge (MFR), Effective from 1st January 2022, which is applicable for all trade. It is composed of three elements: Schedule Data, Consumption, and Utilization. Read More Here 

PERMA has updated UAE local charges Export tariff revision from 1st December 2021, VSL sailing Bill of Lading AED 530/ BL SET will be applicable. Read More Here 

CMA CGA has implemented revision of carrier and local charges. Effective 1st January 2022 for UAE. Read More Here 

CMA CGA has revised the Terminal Handling Charges (THC) for shipments to and from Port Khalifa(Abu Dhabi), Effective from 1st January 2022. Read More Here 

CMA CGA has informed all clearing Agents and forwarders they will not be providing invoices to consignee vendors from 15th Jan 2022. All import shipment freight and local charges invoices will be available on customer web login cmacgm.com 

Emirates shipping line has increased General Rate(GRI) from UAE to Zanzibar, Tanzania. Effective from 11th Jan 2022, applicable for all UAE cargoes connecting on this vessel/voyage in order to sustain and continue to provide a high-quality service. Read More Here 

UAFL has implemented  a Late Bill of Lading (B/L) release fee, Effective from 1st Jan 2022, in case of any delay in collection of Bill of lading documents for all the vessels departures on and after 1st Jan 2022 Read More Here 

ESL has implemented an Environmental Fuel Surcharge (EFS), Effective from January 2022,  as per below will be imposed based on a Low Sulphur fuel price of between US$600 to US$650 per ton and will remain the same in February 2022. Read More Here 

MSC will be implemented late D/O collection fee, Effective from 1st February 2022. Read More Here 

Maersk offers the broadest coverage and competitive transit times at unmatched reliability, effective February 1st, 2022, that will proceed and cancel any booking booked through SSIB aging 15 days and above with no container(s) linked to it to free up space allowing the opportunity to more customers to book, materialize and load their shipments with them. Read More Here 

CMA CGA has implemented Peak Season Surcharges (PSS03), Effective from February 15th 2022, for cargo from Middle East Gulf, Red Sea to USEC + USGC + Canada East Coast. Read More Here 

Factory Output News January 2022    

Financials overtook Healthcare to take the top place in the worldwide sector output ranking in December. Consumer Services was the lowest-performing industry, despite a global increase of COVID-19 cases. 

Factory output news  January 2022

United Arab Emirates: The second unit of the UAE’s Barakah nuclear power plant is slated to commence commercial operations in the months ahead, according to the Emirates Nuclear Energy Corporation (ENEC), while the third unit of the station’s planned four reactors will begin operations in late 2022. 

Saudia Arabia: Almarai, a Saudi food behemoth, has agreed to buy a beverages facility in the United Arab Emirates from Binghatti Beverages Manufacturing for 215 million dirhams ($58.5 million). 

Singapore: Changi Airport is once again soaring high in terms of aviation cargo traffic, after two years of pandemic-induced global interruptions gave way to increased demand spurred by supply chain disruptions and an internet shopping boom. 

Cambodia: The Cambodian Development Council(CDC) has authorized nine new investment projects totaling $43 million. 

China reverses a three-year drop in auto sales and transitions to a new energy vehicle. According to China’s growth strategy, NEVs will contribute to around 20% of cars sold in 2025, with the majority of them being Chinese – owned carmakers’ brands. – Future import automobile volumes will be lower. 

Philippines exports are on the mend, with a 15.2 percent increase from January to November 2021. Boosted by a record-breaking 95 percent growth in the value of coconut oil exported. Electronics, manufactured items, and mineral materials were among the other major exports that increased by double digits or more. 

United States: According to the Empire State Manufacturing Survey, US manufacturing activity slowed to start the new year, dropping for the first time since June 2020. The new orders index declined for the first time in 17 months, but manufacturers’ input prices remained high. 

Pakistan: The textile exports fell by $250 million in December as a result of a gas shortage, which limited the workers in mills and factories. 

This Month’s Eye-catching News     

Global Container Volume YoY Import Change by destination Region

Congestion and bottleneck problems are worsening getting into 2022. Read More 

Supply chains disruption is likely to continue in the first half of 2022. Read More 

Here is a list of last-mile delivery companies and startups transforming shipping and same-day delivery Read More Here 

New trucking vaccine mandate is likely to make fruit and vegetables more expensive Read more Here 

10 major airlines have signed a letter warning of massive flight disruptions and supply-chain chaos as AT&T and Verizon plan to roll out 5G services Read More Here  

8 top companies chasing the $61 billion e-commerce packaging market Read More Here 

FedEx Logistics to call at Hueneme for three voyages Read more here 

Tanger Med’s container handling grew even faster in 2021 than in 2020. Read More here 

American Airlines cut 674 flights on Sunday, the most cancellations of any airline, FlightAware data showed. Read More Here 

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