Freight Market Update: Air & Ocean [November 2021]

Freight Market Updates November 2021

The Topic of the Month

This month we are heading in for the last stretch before the Christmas season. We are already experiencing a slight decrease in the price peak of the East-West Trade. Urgent or missed shipping dates from suppliers of products would need to move their goods by “multimodal Sea-Air or just by Air” alone to make it in time to be on the shelf of their favorite retailer.

Shipping lines collectively will earn 130 Billion Dollars in profit with the current supply chain crisis and this profit will go into diversification and M/A for the company, as seen with Maersk’s buying spree lately.

Keys

Sign	Meaning
++	Strong Increase
+	Moderate Increase
=	No Changes
–	Moderate Decline
—	Strong Decline

Ocean Freight Market Updates November 2021 United Arab Emirates

Outbound Ocean

ME – North America

One line Status: Carriers keep reporting record profits and predict increased demand as long as inventories remain low. They are not releasing USA East Coast bookings due to transshipment port bottlenecks whether Trans-Pacific Eastbound (TPEB) rates will remain steady, fall more, or rise again. The demand forecast stays strong, although this has passed its peak for 2021, as any just-in-time cargo for the holidays will now most likely need to go via quicker means of transport.
Local Rates – Rates continue to increase. PSS/GRI applied by all carriers. (+)
Local Space – Extremely Critical (–)
Local Capacity/Equipment – Limited but available on selected carrier (-)
Notes- Bookings need to be placed 3-4 weeks in advance.

ME – Europe

One line Status: Space and equipment shortages persist since market demand constantly outstrips supply, and rates have been extremely high for a long time. Blank sailings and a lack of equipment increase the overall space dilemma. Lightweight cargo is preferred by carriers. Space is limited and only offered at premium rates. Schedule dependability is extremely low due to continual vessel delays and shifts.
Local Rates – Rates remain at an all-time high. They have, however, remained constant throughout October 2021 and into November. A few carriers have revised their rates substantially downward. (+/-)
Local Space – Critical space situation (-)
Local CapacityEquipment – Available (-/=)
Notes- Make your reservation at least 3 weeks before the Container loading. Take into account premium alternatives, which may be restricted. Be adaptable in terms of equipment.

ME – Africa

One line status – Rates, GRI, and premium fees continue to rise in West and South Africa. Only bookings made at least 3-4 weeks in advance are being considered. Carriers’ allotment for outbound ex GCC is still low. The space situation in East Africa remains precarious. Space is only available for reservations made at least 3 or 4 weeks in advance. Carriers are releasing bookings against “Sea Priority/Shipping Guarantee” on the majority of lanes in Africa.
Local Rates – Prices are on a general increase (+)
Local Space – Critical and low for East Africa, while relevantly at ease for West Africa (-)
Local Capacity/Equipment – available (+)
Notes- Only bookings made at least 3-4 weeks in advance will be considered and Priority is given to cargo utilizing “Shipping Guarantee” cargo

ME- Mediterranean MED

One line Status – Rates are still increasing. Space is limited and only offered at premium rates. 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 (Indian sub-continent)

One line Status — There is a shortage of 20′ equipment at Red Sea ports. In comparison to October 2021, rates have risen.
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- Rates have increased along with a shortage of equipment for Asia-bound freight. To save turnaround time, carriers prefer to relocate empty boxes rather than laden boxes. Reduced free time at the destination.
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 – Christmas and Chinese New Year in China will drive significant demand for container shipping in the 4th quarter of 2021. Costs have risen, owing to a lack of equipment for goods heading for Asia. While power constraints in certain Chinese provinces may impede output, demand remains extremely high.
Local Rates – Price are on a general increase (++)
Local Space – Tight Space (-)
Local Capacity/Equipment – available (-/=)
Notes- Reservations must be made 2-3 weeks ahead to secure

ME – Oceanic

One line status- Backlogs at origin and destination ports continue to have an impact on the network, and the Q4 capacity outlook remains constrained. Temporary port closures, along with industrial action and COVID cases, continue to create disruption and the need for ad hoc contingencies and port omissions to restore schedules.
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 – Due to insufficient capacity, most carriers are not taking bookings. The situation is expected to remain unchanged in the near future.
Local Rates- Prices are on a general increase (++)
Local Space – Very tight (–)
Local Capacity/Equipment – (-)
Notes- Reservations must be made at least 4 weeks ahead to secure

Inbound Ocean market update the United Arab Emirates   

North America

One line status- Congestion should be avoided by temporarily relocating away from the Port of Savannah and toward Charleston. Because another complimentary service will be joining the trade, there will most likely be a modest-capacity opening between the USEC (United States East Coast)and the Middle East. The AWS (Amazon Web Service) connections and MLB (Mini Land Bridge) alternatives from USWC (United States West Coast) to the whole area continue to worsen, resulting in additional GRIs from USWC and US Gulf.  

Local Rates – Multiple GRIs announced on October 1 and October 15 for dry and reefer cargoes are anticipated to be enforced. (+)   
Local Space – Tight from the US West Coast. 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 – Capacity tightest from the US West Coast. Container and chassis shortages continue to plague IPI (Interior Point Intermodel) origins. Standard equipment is readily available at ports, but any unique equipment is difficult to obtain. 
Notes– Book 2-3 weeks out, Trucking Shortage 

AsiaPacific    

One line Status –The Far East’s equipment stock level is gradually increasing, however, 40’HCs remain in short supply. Vessel blankings/slidings are causing a shortage of overall capacity supply. Delays are caused by ongoing port congestion. The market demand for African/Eastern  Mediterranean is still quite high. Volumes in the Middle East are somewhat declining. The Red Sea is suffering from a capacity deficit, and reservations are still high. 

Local Rates –  increase (+)   
Local Space – SuperCritical (–)   
Local Capacity/Equipment – Under capacity (-)    
Notes– Book 2-3 week before, Trucking shortage 

Europe   

One line status –The equipment condition is similar to Asia. Space will be extremely limited, in part because FE3 will continue to exclude Jebel Ali until at least Q1 2022. Rates have mainly been prolonged or slightly raised. 

Local Rates – Rate slight increase (+)    
Local Space- Limited  (-/=)    
Local Capacity/Equipment- (-)   
Notes-  Book a week before, Trucking Shortage 

Latin America   

One line status – The region has been plagued by structural service changes, port omissions, and equipment shortages (especially Brazil, Argentina, Ecuador, Columbia, and Chile). In 2022, no new capacity is planned to be added. Rates are still rising. Mexico is an exception, with export volumes remaining consistent despite diminishing service owing to a number of port exclusions. 

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 – Available (=)   
Notes-  Book 2 weeks ago 

Air Freight Market Updates November 2021 for the United Arab Emirates    

Air Freight Demand  – Demand growth in all regions continued robust in 2021. Presently +5% (YTD Jul) above pre-pandemic levels; total increase +21 percent YoY on Aug 21. Note that the Jul, Aug 20 demand baseline was enhanced by PPE(personal proactive equipment) movements. In terms of the YTD July comparison, demand is +5% greater than in 2019. Congested ocean ports continue to add to air traffic, although marine freight prices have dropped marginally ahead of the Golden Week vacation. Outbound demand from Europe was stable, but outbound volumes from the Middle East increased. The volume of Asia-Pacific export cargo has increased. In Southeast Asia and China, the Covid crisis may have an impact on demand in the coming months. 

Carrier Capacity –  Capacity remains insufficient to meet present demand. Global capacity is still impacted and is down -22 percent from September of last year. The resurgence of the Delta variant in China, Southeast Asia, and Europe is expected to have an impact on belly recovery. Capacity increase in North America and Latin America has been driven by a large intake of vaccinations, but there are still backlogs and space limits at the bulk of North, Central, and South American (AMER) airports. 

Local Rates – Airlines continue to aggressively control yields; excess capacity is still available at a charge. Rates were +86% higher on August 21 than the 2019 baseline and +20% more than a higher 2020 baseline. Rates will stay high as we continue to see massive demand growth versus limited capacity. Rates to/from Asia Pacific (particularly China) are anticipated to continue high owing to persistent limitations; market rates are roughly four times higher than average. 

The Middle East and Air Carriers ME    

In September, the easing of COVID-related limitations stimulated economic activity in both Saudi Arabia and South Africa. In the UAE, the pace of economic expansion slowed marginally in September but remained favorable to corporate activities. 

African carriers are predicted to get 35% more aircraft deliveries in 2022 compared to 2021, while Middle Eastern airlines are expected to receive 44% more deliveries during the same timeframe. Nonetheless, the number of deliveries in both areas is expected to stay below 2019 levels. 

According to IATA, RPKs( down -28.4 percent in August) of Middle Eastern and African carriers declined by 68 percent and 58 percent, respectively, compared to August 2019. Among the major regional routes, traffic between the Middle East and North America has shown to be the most robust. 

Asia   

In North China, the market has swiftly recovered from the holiday and is returning to its usual high season. Rate levels are rising as a result of ongoing cancellations by major carriers. 

Demand is outstripping supply, and capacity is limited ex-HKG because of passenger flight cancellations. Flight cancellations have also been issued by other airlines. Rates on both the Trans-Pacific Eastbound(TPEB) and Far East Westbound(FEWB) lanes in South China continue to rise. 

In Taiwan, as we approach the customary peak season, the market remains tight and rates remain high. Capacity is nearly fully booked until the end of the month, with demand particularly strong on the east coast of the United States. The first departures for volumetric freight occur around the first week of November. 

The Bangkok market remains extremely tight, with no notable improvements from the previous week. Demand and prices are consistent in ex-Northern Vietnam, and some manufacturers are spending extra hours to produce cargo. Demand is rising in ex-Southern Vietnam, mostly due to significant accounts and charter requests ex-SGN (Ho Chi Minh City in Vietnam). Rates are continuing to rise, and capacity is extremely limited. Throughout the weekend, all available space is filled in SouthEast Asia. 

Europe  

As we approach various holidays in November, demand is expected to increase. Capacity, on the other hand, should promote stability, since vaccinated passengers may fly from the United States to Europe. This bodes well for freight capacity. This week’s market has seen an increase in project cargo. The demand is great, but it is manageable. There has been a significant rise in demand for JFK, with direct flights being fully booked this week. Rates have risen on the East Coast of the United States as a result. Moving through a secondary hub may be favorable if the transit time allows. 

There are no updates on Far East Eastbound so far. Capacity remains manageable. The ground handling terminals in Amsterdam and France are still under a lot of stress.  FRA terminal congestion continues as an issue. The AMS import terminals are doing better than the FRA. 

The advice is still in effect for all trade channels exiting Europe: Book at least 7 days ahead of CRD for the best pricing and route options. 

North America & Latin America    

Rates are rising from North America to Asia and Latin America. Rates into Europe haven’t  changed significantly. Due to the present labor constraint, leading European hubs have somewhat longer transit times and a high throughput time. Ground handlers at LAX/ORD/JFK continue to encounter major backlogs and are utilizing off-airport facilities to manage the influx of inbound cargo, which has a knock-on impact on the export side. Many have reduced their storage free time and announced new, earlier export shutouts to suit greater throughput times and screening needs. 

In the second half of October, US export demand grew. Larger shipments from major outgoing gateways can take 2 to 4 days from the time they are booked to the time they are uplifted into Europe, Latin America, or Asia. Recommendation Plan ahead of time, keeping in mind the length of time passengers spend at airports. 

Local Updates the United Arab Emirates, November 2021   

Logistics News November 2021

Freight Collect Information on MSC details of shipper and consignee must be informed to MSC at POD for approval on every collect shipment before the booking stage. 

ESL implemented an Overweight Surcharge (OWS) from the Indian Subcontinent and Arabian Gulf to East African ports. Read More Here 

ESL has imposed IMO 2020 Environmental Fuel Surcharge (EFS), Effective from 1st November 2021, based on a Low Sulphur Fuel price of between US$500 to US$550 per ton for October 2021. Read More Here 

Hamburg Sud has informed about their 24*7 Invoice Download Facility and payments solutions from ODEX. Read More Here 

Hapag Llyod has applied Weight Deviation Fee (FIO) for shipment of single and multi containers exceeding three tons between the booking and shipping instruction at a container level. Read More Here 

The China Navigation Company Ltd. (CNCO) has announced that it has been renamed Swire Shipping Ltd. (Swire Shipping). Read More Here 

KMTC has introduced the process of Web booking and BL submission through EKMTC Portal for real-time information such as schedule cargo tracking, booking records, B/L records, and so on. Read More Here 

ESL has published schedule and cargo tracking for East Africa Ports for securing transit time and minimizing the impact. Read More Here 

Hamburg Sud has decided to reroute all their vessels until the end of January 2022 from GBFXS to GBLGP due to the situation in Felixstowe and the high yard density. Read More Here 

Maersk has updated APMM Global operations, Maersk vessels in real-time and gained access to AI-powered predictive analysis and estimated times of arrival (ETA) via their Hub. Read More Here 

Hapag Lloyd has a new fresh look and new feature in their Quick Quotes Tool, available for use at their website.  

CMA CGM, with immediate effect sea priority Go (SPGO), will apply to all bookings made to East Africa from the UAE. There will be an increase in quantum effectiveness immediately. To know more about the quantum reach out to us  Read More Here 

Factory Output News November 2021  

Middle East   

With the start of Expo 2020, the UAE economy looks to be in good health. The PMI fell to 53.3 in September, but it still indicated a significant improvement in non-oil business conditions, as businesses continued to perceive a revival in demand following the epidemic. The relaxation of worldwide travel restrictions contributed to the increase of new business. 

Asia  

Mainland China‘s economy is facing headwinds from the real estate collapse and electricity shortages. Industrial production growth slowed to 3.1 percent year on year in September, down from 5.3 percent in August, with energy-intensive items such as metals, chemicals, and building materials bearing the brunt of the blow. Coal-based thermal power, which accounts for 70% of the country’s electricity output, has been hampered by Beijing’s decarbonization efforts, as well as the end of coal imports from Australia in 2021. Meanwhile, the government’s deleveraging drive aimed at real estate developers is depressing real estate and construction activities. 

Taiwan Semiconductor Manufacturing Co. has committed to sending logistical information to the US government by November 8th in order to assist in resolving semiconductor supply issues. 

Singapore SME agriculture enterprises are expanding in order to lessen dependency on imported food. 

Vietnam‘s manpower shortage continues to pose a danger to logistics in the country. 

India Pink Bollworm infestation has resulted in up to 76 percent cotton output loss in India’s key cotton-growing region of Bathinda and Mansa. 

Port congestion in Pakistan may have an impact on the country’s energy supply. 

Europe  

The mid-2021 economic spike in Western Europe is receding, and input shortages are limiting output. With the easing of pandemic-related limitations, real GDP is expected to increase at a reasonable pace in Q3, powered by consumer expenditure. 

Production is being hampered by a lack of electronic components and raw materials. Meanwhile, demand is slowing as increasing inflation reduces real household earnings. The Eurozone’s real GDP is expected to rise by 5.0 percent in 2021, 4.0 percent in 2022, and 2.2 percent in 2023. While the prospects for development in Emerging Europe are slightly better, near-term growth is endangered by new waves of COVID-19 cases in various economies, notably Russia, Romania, and the Baltic States. 

America   

Concerns over COVID-19 and increasing supply constraints may postpone some US growth beyond 2021. The projection for real GDP growth in 2021 has been reduced by 0.3 percentage points to 5.4 percent, and by 0.2 percentage points to 4.3 percent in 2022. The changes reflect slower consumer spending, fewer light vehicle assembly, and dismal third-quarter exports. On the bright side, a strong report on retail sales in September suggests that consumers are still willing to spend as COVID-19 virus infections fall. 

Real GDP is expected to rise 2.8 percent in 2023 and 2.7 percent in 2024 if consumer spending on services, corporate investment, and exports continues to rise. The prediction is based on the approval of the Infrastructure Investment and Jobs Act, but not the Build Back Better reconciliation package, which includes significant increases in social spending and taxation. 

This Month’s Eye-catching News   

Spending on Halloween candy is projected to be up a spooktacular 10%  [Read More Here] 

Why the supply chain crunch will continue into 2022 [Read More] 

Transportation executives wrestling with the supply-chain gridlock that is frustrating [Read More Here] 

Industry Short 80,000 Drivers Today, May Be Short 160,000 by 2030 [Read More Here] 

Dedicated business booms for fleets as shippers avoid the pricey spot market [Read More Here] 

Supply chain cybersecurity breaches have hit an alarming percentage of firms [Read More Here] 

 Peak shipping season can be broken down into two spikes in demand.{Read More Here] 

Tighter Warehouse Space Adds to the Supply-Chain Squeeze [Read More Here] 

Shippers Find New Supply-Chain Hurdles at Alternate Ports [Read More Here] 

Retailers say the levies on containers stuck at terminals will end up hitting powerless freight customers [Read More Here] 

Home Depot hires Walmart delivery drivers to drop off paint and more to customers’ doors [Read More Here] 

China’s Energy Crisis Is Hitting Everything From iPhones to Milk [Read More Here] 

LaserShip, OnTrac deal sets regional parcel carriers up as FedEx, UPS alternatives [Read More Here] 

No more room at the logistics warehouse in, Prologis says [Read More Here] 

Plans call for McAlary to start in the chief legal officer post on Nov. 15 [Read More Here] 

Snowcone the Happy Unicorn is the latest victim of manufacturing chaos [Read More Here] 

Target goes down the vessel chartering path taken by Walmart, Home Depot, and Costco [Read More Here] 

Supply Chain: Industry looks beyond Asia for sourcing – Furniture Today [Read More Here] 

Global trade rebound beats expectations but marked by regional divergences [Read More Here] 

China’s export advantage is being squeezed by soaring sea freight prices and rising raw material costs | South China Morning Post [Read More Here] 

SoftBank-backed Flock Freight is the freight industry’s newest unicorn [Read Morte Here] 

Procter & Gamble Uses Its Size to Lessen Impact of Supply-Chain Mess -[Read More Here] 

Big Retailers Becoming Big Property Owners With Warehouse Deals -[Read More Here]