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FLIGHT OPERATIONS in the most important Air Corridors
The JAS Airfreight team continues to offer flight operations in 2 of the major Air Freight corridors:
Chartered flight operations from EUROPE to USA and back to EUROPE
Chartered flight operations from China to Europe
Additionally, we continue to offer our SEA-AIR solutions via Singapore and Incheon hubs which are connecting Europe, North and South America with China. Our Airfreight team is closely watching the market regarding the latest developments and coordinating solutions based on our client needs.
The demand for ocean capacity is stronger than pre-corona virus on most trade lanes, especially out of Asia. The need to replenish inventories, primarily in the PPE, e-commerce, office supplies, exercise equipment, and white goods are contributing factors to the surge in demand.
Carriers are taking advantage of the high demand and continue to announce blank sailings in several trade lanes in order to manage and control supply and demand, whilst introducing additional loaders on other trade lanes.
Vessel utilization is over 100% on the majority of trade lanes, with carriers now maintaining a roll pool. As such, some alliances are adding additional sailings to reduce the backlog.
Strong demand has led to significant GRIs on many trade lanes and because the supply is being carefully controlled by the carriers, the rate increases are holding firm.
Equipment availability, especially out of Asia, is a considerable challenge, with carriers implementing surcharges on High Cube equipment. Consider substituting Non-Operating Reefer (NOR) equipment or standard containers for High Cubes.
Global schedule reliability continued its upwards trend and improved by 3.1 percentage points M/M in June 2020 to 77.9%. Looking back at the past few months, it is clear that even at peak blank sailings, schedule reliability was not impacted, leading us to the conclusion that carriers are finding it easier to manage schedule integrity of a fewer number of vessels pers string.
The global average delay for LATE vessel arrivals also improved, decreasing by 0.71 days M/M in June 2020 and reaching 4.63 days, although still the highest figure for this month. On a Y/Y level, the June 2020 delays were 0.59 days higher.
Nevertheless, as congestion is now a major factor at US East and West Coast ports, delays will increase.
With carrier rates continuing to increase and equipment challenges globally, consider whether utilizing our LCL services is an option where smaller quantities can be shipped at a lower cost and without equipment constrictions.
Forecasting continues to be the name of the game. Now more than ever it is important to communicate with your local JAS office as to what cargo you expect to move on a weekly basis. Bookings need to be made at least 4- 6 weeks in advance.
Please keep in contact with your local JAS office to provide your forecast.
Vessel utilization on the main lanes from Asia to Europe / Middle East / North America and the Mediterranean is over 100%. Due to strong demand, especially on the TPEB lanes, carriers are implementing extra loaders in order to “sweep” rolled containers. However, as the Autumn Festival and Golden Week approach, carriers have again announced blank sailings
There is a critical equipment issue in Asia, especially in China, where 40’ HC are extremely difficult to secure. Consider using other types of equipment where possible. Carriers are repositioning equipment from other origins and ordering new equipment, but it will take several weeks to alleviate the equipment shortage.
Carriers continue their blank sailings on the trans-Atlantic and will extend the capacity withdrawals deeper into the fourth quarter even though volumes are increasing, especially in the automotive and manufacturing sectors. Certain carriers have established rolling pools that will go into October to clear.
With that said, rates are trending slightly downward over the past month, possibly because the outlook is uncertain.
On the Far East eastbound lanes (back-haul), blank sailings are consistent with the westbound lanes (head-haul). Rates have stabilized on this lane and there is capacity available.
Ports are fully operational throughout Europe and trucking is available in most locations
The situation in North and South America is very similar to that of EMEA where carriers have reduced capacity and services, and bookings require additional lead times and advanced bookings.
Ports and terminals are operational, although some terminals have implemented 1 to 2 closings per week. Equipment availability is generally not an issue but there are some challenges, mainly in the interior container yards.
There is port congestion on the US West Coast and US East Coast. Also expect delays on Intermodal points in the USA as rail carriers are struggling to reposition their rail cars back to where the cargo is.
Montreal is still seeing a back-log of containers due to the recent strike, which has now been settled for at least the next 7 months.
The JAS World Ocean Team is working diligently with all core partners to meet customer requirements. It is imperative forecasts are provided to our local offices to allocate our space properly. Please consider utilizing our LCL services which will allow to ship at lower costs and alleviate equipment problems.
Contact your closest JAS office for assistance.