Newsletter – October 6, 2021

  • 06

    Oct

    Newsletter – October 6, 2021
    AIR FREIGHT UPDATES
    Economic Performance of the Airline Industry

    iata.org
    Key Points

    • Airline industry is recovering gradually from COVID-19 but RPKs are still estimated to be only 40% of pre-crisis levels in 2021.
    • Air cargo has recovered above 2019 levels and is expected to be strong in 2022 with the support of strong global trade.
    • Vaccines will allow some governments to relax restrictions and support global travel to reach 61% of 2019 levels in 2022.
    • The industry is forecast to make net losses of $52 billion this year, cutting these losses to $12 billion in 2022.
    • Airlines are forecast to cut costs by 31% in 2021 vs 2019. As the traffic recovery continues airlines will face cost pressures.
    • Airlines continued to receive life support from their governments, totaling $243 billion since the beginning of the pandemic.
    • Airline financial performance is expected to recover in all regions in 2022. North America is expected to turn to profitability in 2022.
    • Read the report here.
    OCEAN  FREIGHT UPDATES
    Bunker surcharges resurface – ‘justified by oil price spike’, say carriers

    theloadstar.com
    As oil prices spike to multi-year highs of $80 a barrel, ocean carriers are preparing to dust off their bunker surcharge mechanisms to mitigate the impact.
    Although several carriers, including CMA CGM and Hapag-Lloyd, have capped further FAK rate increases, surcharges were specifically excluded from their rate moratoriums.
    Rotterdam-sourced LSFO (low-sulphur fuel oil) increased a further $4 yesterday, to $560 a tonne, having jumped 20% since the end of August. Read more here (login required).

    Ship at anchor off California ports may have caused major oil spill

    freightwaves.com
    Coincidence? Up to 144,000 gallons of oil is estimated to have spilled from a pipeline off scenic Huntington Beach, California, and within eyesight, an armada of commercial ships are stuck waiting at anchor or drifting. As of Tuesday, there 55 ships of all types with anchors physically dropped, including 38 container vessels.
    During a press conference Tuesday, members of the response team didn’t outright blame one of these ships for weighing anchor, dragging the pipeline and causing it to puncture. But there was little other way to interpret what they said. Read more here.

    Transportation capacity declines accelerate in September

    freightwaves.com
    The rate at which transportation capacity contracted increased in September, according to a supply chain survey released Tuesday.
    For 16 consecutive months, capacity has been on the decline. The latest reading of the Logistics Managers’ Index (LMI) showed the capacity component of the dataset fell 330 basis points from August to 37.2% in the month. Read more here.

    GROUND AND RAIL FREIGHT UPDATES
    After causing chaos in the UK, truck driver shortages could soon hit the rest of Europe

    cnbc.com
    LONDON — The truck driver shortage plaguing the U.K. is not just a British problem, experts say, with the wider Continent also facing a shortfall and potential supply chain problems.
    There was more than a whiff of “schadenfreude” (or enjoyment from the woes of others) in mainland Europe last week as the U.K. faced a petrol crisis. There were long lines of cars outside British gasoline stations and even fights on forecourts as panic buying spread across the country amid a shortage of truck drivers able to deliver fuel. Read more here.

    INTERNATIONAL BUSINESS – GOVERNMENT UPDATES
    China’s export advantage is being squeezed by soaring sea freight prices and rising raw material costs

    scmp.com
    Chinese exporters are being hurt by sky-high freight costs and rising raw material prices, rather than falling demand for goods from developed countries that are ready to reopen their factories, manufacturers say.
    Freight prices have jumped more than 400 per cent from their lowest point last year, according to the Shanghai Containerised Freight Index, causing importers to question the economic viability of buying from China. Read more here.

    Holiday season in peril: Disruptions could leave shoppers, retailers disappointed

    freightwaves.com
    As supply chain disruptions have gone mainstream in 2021, it has had an immediate impact on the shopping plans of Americans heading into the holidays. A recent parcelLab survey found that 50% of U.S. consumers plan to have their 2021 holiday shopping completed by Cyber Monday – the unofficial kickoff of the e-commerce holiday shopping season.
    The Holiday 2021: Consumer Preferences and Expectations survey, conducted in partnership with third-party research firm YouGov, also found that 5% had already completed their shopping; 12% said shopping would be done by Halloween; and 33% would be finished by Cyber Monday. Read more here.

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