Transport Update 13th October

Welcome to the Zencargo weekly freight market update – the latest news from our freight and procurement teams on the real experience of shippers.

This week: Storm Kompasu, China’s power outages continue

• Ocean

• Air

• Road

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In Focus: Storm Kompasu is expected to further disrupt ports in China

Chinese officials have ordered ports in the Shenzhen region to suspend operations as Storm Kompasu is expected to pass south of Hong Kong overnight before moving West.

Yantian services were suspended on 12 October and the closure comes as ports in the region are already reporting strong backlogs and heavy levels of congestion.

The storm combined with a power-shortage crisis due to coal shortages and government rationing on electricity has caused a ripple effect on the global supply chain. Congestion is increasingly severe at major Chinese ports, creating further delays and reducing efficiency for the movement of goods out of the country.

Businesses need to be prepared for delays in the coming days.

Ocean

Asia 

1. US market

• • There are strict epidemic control measures at PVG airport. 40% of cargo flights have been cancelled for one month and we have no news on when they will be reinstated. Terminal workers are still working to the closed loop system, meaning they are working 14 days on/14 days off, this is resulting in reduced manpower and delays. 
  • There are currently issues with shipments flying into JFK due to lack of manpower, which is resulting in an increase of ULD breakdown times. Air China service to JFK should be avoided. 
  • Rates have decreased this week due to the 7 day holiday and not all factories returning to work. We expect this reduction to be short lived and rates will start to increase again in the lead up to Christmas.
  • Rates and space must be checked on a case-by-case basis.

2.  EU market (base airport like FRA/AMS/LUX, etc)

• • There are strict epidemic control measures at PVG airport. 40% of cargo flights have been cancelled for one month and we have no news on when they will be reinstated. Terminal workers are still working to the closed loop system, meaning they are working 14 days on/14 days off, this is resulting in reduced manpower and delays. 
  • Rates have decreased this week due to the 7 day holiday and not all factories returning to work. We expect this reduction to be short lived and rates will start to increase again in the lead up to Christmas.
  • Rates and space must be checked on a case-by-case basis

3. UK market

• • There are strict epidemic control measures at PVG airport. 40% of cargo flights have been cancelled for one month and we have no news on when they will be reinstated. Terminal workers are still working to the closed loop system, meaning they are working 14 days on/14 days off, this is resulting in reduced manpower and delays. 
  • There are currently no direct flights operating to LHR. 
  • Rates have decreased this week due to the 7 day holiday and not all factories returning to work. We expect this reduction to be short lived and rates will start to increase again in the lead up to Christmas.
  • Rates and space must be checked on a case-by-case basis. 

Americas

• Rates into Asia have increased slightly over the last week.
• Rates to the UK and Europe remain the same. 
• JFK Airport is experiencing backlogs breaking down their ULD’s. Air China and their ground handling agent is particularly affected. 
• USA is set to lift travel ban for most noncitizens from November, so long as they are vaccinated. The eased rules are expected to drive up demand for transatlantic travel. This is good news for the air freight industry as this will no doubt bring more flights and capacity for cargo. 
• ORD is still over capacity and there are issues over release updates. Forwarders are having to send in trucks to collect without knowing if freight is ready and the ground handling agents aren’t answering their phones 
• Forwarders are choosing to use smaller airports as much as possible as there is less congestion. Freight rates will be higher but there is less chance of incurring additional costs for attempted pickups, waiting time and storage. 
• LAX is still a challenge, there are usually waiting time charges applied to most shipments due to the long queues to collect/deliver into the ground handling agents warehouse

Europe/UK

• Rates into Asia and North America remain stable as there seems to be enough capacity to meet demand.
• USA is set to lift travel ban for most non-citizens from November, so long as they are vaccinated. The eased rules are expected to drive up demand for transatlantic travel. This is good news for the air freight industry as this will no doubt bring more flights and capacity for cargo.

Road

UK Haulage

HGV Driver Shortages Continue

An extra 2,000 training places will be available to increase the number of lorry drivers, but they are unlikely to have much effect before Christmas. The places will be available through previously announced “skills boot camps” backed by £17m government funding and with participants being guaranteed a job interview afterwards. The UK shortfall is estimated to stand at 100,000, according to the Road Haulage Association, and has been blamed for the recent fuel crisis.

Congestion at the port of Felixstowe

The Port of Felixstowe is struggling to cope with the volume of cargo and has become severely congested. The HGV driver shortages combined with the pre-Christmas peak, congested inland terminals, poor vessel schedule reliability and the pandemic, has resulted in a build-up of containers. The port’s management is taking action to improve the flow of traffic but is considering turning vessels away unless the situation improves.

European Bank Holidays

October 12th = Spain

October 23rd = Hungary and Macedonia

October 25th = Cyprus, Czechia, Greece

October 26th = Austria

October 29th = Turkey

October 31st = Germany (Regional) and Slovenia

The route ahead

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