JAS RESPONSIVENESS

MARKET CONDITIONS

Find Blue World Flight Operations details under the Air tab below.

AIR

Loading an airplane

GLOBAL

  • Air cargo capacity was down 10% between Aug 23-Sep 5, compared to the same weeks in 2019.
  • Global air cargo capacity increased across freighters and wide-body belly, up 2% vs. the previous two weeks.
  • International air cargo capacity out of Shanghai PVG has dropped ~30% between weeks 30 (Jul 26-Aug 1) and 35 (Aug 30-Sep 5) due to labor constraints.
  • US monthly air trade reached an all-time high in July 2021, approaching 800k tonnes.
REGIONAL

APAC

  • Capacity to NORAM is better than the same period in 2019, but not sufficient to support strong demand.
  • Capacity to and from Europe is still at about – 10% compared to 2019, while demand is up in both directions.
  • “Ghost” flights will continue to be essential to maintain capacity to current levels as there will not be additional passenger flights until possibly the summer season.
  • Lack of space for ocean freight has forced some shippers to switch ocean shipments to air.

EMEA

  • The situation in and out of Europe is still critical, especially in the Transatlantic lanes which are still at less than 30% of 2019 capacity. European countries may be in the position to ease their lockdown soon.

AMERICAS

  • North/South capacity is similar to 2019 for south bound and better for north bound drive mostly by fresh cargo.  
  • Capacity in and out of LATAM, both on the Transpacific and Transatlantic routes, is still critical - especially between Europe and LATAM.
  • Space into Brazil is particularly scarce following multiple flights cuts operated by some     European airlines.

JAS RESPONSE

JAS FLIGHT OPERATIONS offers service on 3 major air freight corridors:

 

Blue World Atlantic

 

Now twice per week between USA and EUROPE

  • 747-400 Cargo from Chicago to Frankfurt and back to Chicago.
  • This service allows for pick-up and delivery in all continental Europe and all USA.
  • Connections to and from LATAM are available.

 

Blue World Pacific

 

  • Multiple weekly flights from Hong Kong to Los Angeles and from Shanghai to Chicago.
  • Connections to LATAM are available.

 

Blue World Orient

 

  • Weekly flight from Shanghai to Frankfurt.
  • This service allows for delivery in all continental 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 clients' needs.

Contact your closest JAS office for assistance.

Flight Operations Details

OCEAN

Ships on the ocean at sunset

Ocean Market Update: January 2022

Global

2022 is starting off in a similar fashion to how 2021 finished with poor sailing schedule integrity, congestion in many ports, rail and truck disruptions around the world, new Covid-19 cases closing or partly closing ports in China, and in the lead up to Chinese New Year, very strong volumes being moved out of Asia. As well as add winter weather conditions to the list.

Vessel utilization is over 100% on the majority of trade lanes with carriers operating rolling pools of at least one week on many lanes. Many carriers are full through the end of January and are either not accepting bookings or only offering bookings for premium services, which carry a booking guarantee but at a much higher rate level. However even these premium services sometimes struggle to provide the equipment.

Despite the demand and exorbitant rates, carriers on Asia-Europe and the trans-Pacific continue to  announce a series of canceled/blanked sailings as part of a comprehensive schedule recovery plan to get vessels back in their intended positions. The carriers say the blanks are aimed at recovering schedules that continue to be heavily disrupted due to port congestion.

The number of vessels that are inactive remains very low with only 0.6% or approx. 150,000 TEU of the total containerized fleet ideal.

The timeline for resolving the challenges, because of the severity and length of the bottlenecks, remains unknown. Once the port congestion is unclogged there will be a massive amount of retail inventory restocking goods to move. The latest U.S. Census Bureau data shows no signs that we’re seeing any slowdown in US consumer spending on durable goods, so the outlook remains that we will continue to see a high demand and a shortage of supply throughout 2022, with a possible resolution in 2023. But this is also dependent on pandemic as well as consumer spending habits.

Covid-19 Situation

Congestion has been an issue affecting global supply chains for much of the pandemic and system-wide labor shortages look set to exacerbate the problem. Business leaders and government health officials are warning that the Omicron variant will increasingly have an impact on labor availability.

Commenting on this issue on LinkedIn, Lars Jensen, CEO of liner consultancy Vespucci Maritime, said: “With the new wave of Covid more people get tested positive. This means more people have to call in sick from work – and that of course goes for all kinds of jobs – including port workers, truck drivers, warehouse staff, etc.

Covid Outbreak CHINA–NINGBO

In early January, and as reported by local authorities of Zhejiang Province, 23 Covid-19 cases were found at a clothing factory in Beilun administrative district in Ningbo.

3 out of 5 container terminals in Ningbo are located at Beilun district and are close to the infected areas. The Beilun district is also the warehouse area. The Ningbo government has announced strict quarantine and disinfection measures in Beilun district.

Fortunately, according to the latest government notice, Beilun district is released from temporary lock-down control as of Jan 8th, with exception of the factory plant of Shenzhou Textiles and some surrounding areas, which are still regarded as containment areas by local government, but it will not  affect daily operation of the Beilun port.

Please note that trucking and warehouse services have been restored to normal.

COVID Outbreak CHINA–Shenzhen

Two Covid-19 cases in Shenzhen have seen local authorities usher in travel bans making it difficult to leave the city with more mass testing underway today in the city’s Longgang district. Trucker availability at the key southern Chinese box port is likely to be hit by this latest outbreak.

This situation will have to be followed closely as Beijing’s strict zero-Covid policy will be enforced to curb local outbreaks with mass testing, snap lockdowns, vigilant surveillance and extensive quarantines.

COVID Outbreak CHINA–Shenzhen

Note that as of January 8th, new locally transmitted Covid-19 cases were reported in Tianjin. As such, the Tianjin government has decided to launch a city-wide Nucleic Acid Test which targets Tianjin permanent residents and people from other cities/countries that currently reside in Tianjin as of Jan 9th. The testing process for all targets is expected to take two days and test results will be obtained within 24 hours. Further announcement and restriction policies will be announced by the government based on the test result.

Here is the latest impact on operations:

  • As of January 8th, Xingang port/terminals operate as normal, and there are no flight cancellations reported at TSN airport, however air import operations may be impacted.
  • Road transportation may be delayed as truck drivers are required to present negative Covid-19 nucleic acid test result taken within 48 hours.

The policy of the Chinese government to implement immediate restrictions in areas where Covid is detected will continue. This will have an effect on shipping to varying degrees.

BAF

Due to increased demand and oil production restrictions, BAF levels continue to rise and there will be more increases in BAF in the coming months. Q1 2022 BAF levels will be approximately 11% higher than Q4 2021.

Schedule Reliability

Global schedule reliability continues to be extremely poor and deteriorated again in November compared to the past several months, with a pathetic reliability of only 33.6%.

Maersk Line was once again the most reliable of the top 14 carrier in November 2021, with schedule reliability of 46.3%, followed by Hamburg Süd with 40.4%. Six carriers had schedule reliability between 20%-40%, whilst another six carriers, Hyundai, PIL, OOCL, Yang Ming, Wan Hai, and Evergreen, recorded schedule reliability of under 20%, with Evergreen recording the least consistent schedule reliability of just 11.8%.

Delays on individual trade-lanes can be far worse (see details per trade-lane further below). It is important that these delays are taken into consideration when reviewing your supply chain requirements.

The global average delay for LATE vessel arrivals decreased slightly and is now at 6.93 days.

In a tightly interconnected network business, congestion kills capacity. Once you pass the congestion tipping point, productivity drops, at just the time when you need increased throughput to work down the backlog. In terminals, container stacks grow and working-room becomes scarce. Empties can’t be accepted because there’s no place to put them. Precious lift machine time and manpower are consumed picking through the stacks to get at the next “hot” load.

Until the congestion improves, expect on-time performance to be extremely poor.

GLOBAL OUTLOOK by trade-lane:

Rates:

Container freight rates retreated in Q4 of 2021 from the all-time highs recorded in Q3 of 2021 as the growth in cargo demand slowed down and supply chain congestion showed tentative signs of easing. However, expect rates on major East-West lanes to increase again in January 2022, ahead of the CNY holidays.

The ongoing supply chain bottlenecks and a worrying new Omicron variant are likely to increase supply chain risks across the globe

Asia to Med / North Europe

Congestion, vessel delays and the ongoings shortage of boxes, plus a two-week shutdown of berths in Ningbo and a resurgence of Covid-19 cases in Asia could be blamed for flat volumes in Q3 2021, as well as signs of consumer fatigue in Europe as there was a spending shift to more on travel and going out.

However, the market is increasing again and expect rates in January to increase again in advance of the Chinese New Year (CNY).  

  • Utilization is more than 100% and demand remains strong overall. It is expected volume will keep strong till at least CNY holiday will start on Feb 1. 2022.
  • Feeder Suspension in South China during CNY would increase logistics challenges and trucking capacity in South China region, please prepare in advance to minimize the challenges.
  • Space would remain tight throughout CNY due to capacity reduction caused by port congestion, vessel delays, and blank sailings. Please arrange booking 4-6 weeks in advance.
  • Port congestion in Singapore and other Southeast Asia countries are reporting extreme congestions with large amounts of cargo stuck at trans-shipment hubs.
  • The CNY has created serious shortage of space & equipment in Singapore, Indonesia, Thailand, and Vietnam.

On a positive note, expect congestion at major European ports to ease slightly.

Asia to Middle East

Weather related issues in the Middle East have closed ports in the Red Sea and Mediterranean but congestion continues to ease in most Middle Eastern ports.

Anticipate freight rates to remain stable or only a slight increase as more vessels are deployed back into this trade-lane and level off at around $8420 per 40’.

Asia to Oceania

In Australia, expect long waiting times at all ports which will continue to place pressure on trade-lanes to maintain weekly sailings.

Because of CNY, demand will stay strong and therefore continued backlogs will occur. These delays will affect the market and as a result, space will become even tighter. Having said all of this, expect freight rates to remain fairly consistent or increase marginally to around $10,220 per 40’.

Asia to NORAM

The decline in ships waiting just offshore of Los Angeles/Long Beach continues to be touted as a sign that port congestion is easing — despite the fact that the true number of waiting ships is actually increasing.

The number of container ships at anchor or loitering within 40 miles of the ports has indeed diminished. The reason: Since mid-November, a new queuing system has encouraged ships to wait outside of a specially designated Safety and Air Quality Area (SAQA) that extends 150 miles to the west of the ports and 50 miles to the north and south.

The count as of January 8th shows there are 29 vessels at berth, 15 container ships waiting at anchor, but another 120 container ships waiting farther out to sea, putting the actual tally at an all-time-high of 164, according to new data from the Marine Exchange of Southern California.

The US West Coast ports will start contract negotiations in the near future as the current agreement expires July 2022. These contract negotiations could lead to further supply chain disruptions as unions may use work slowdown tactics to leverage their negotiating positions.

Cargo volumes from Asia to the US East Coast and US West Coast increased by 20% and 14% year over year and there is no indication that momentum will drop off in 2022.

The Chinese government is encouraging factories to remain open during the CNY, hence there may not be the usual drop in production during the holiday period.

As a result of the volumes, the rates on the TPEB trade-lane increased in December by 9% to reach an average of $11,787 per 40’ container. Expect the rates to continue to rise in January and February.

The announced “emergency fee” by the ports of Los Angeles and Long Beach continues to be pushed back week after week as the number of older containers at the port continues to decrease. To also help ease some of the congestion, terminals in LA/LB are increasing the hours that containers can be picked up and/or delivered by truck. You can assist by scheduling your container pick up as soon as possible

Expect delays on Intermodal points in the US as rail carriers are struggling to reposition their rail cars back to where the cargo is. Chassis’ are also in short supply. Allow at least an additional 12+ days for cargo availability once vessels arrive. Carriers advise that they are fully booked into February, so the booking window is 6 weeks in advance.

NORAM to Asia

In December, the US congress signed the bipartisan Ocean Shipping Reform Act of 2021. One of the significant components of the act was to establish a trade role for the Federal Maritime Commission (FMC) to promote US Exports which have been declining in the recent past. The 2021 volumes declined 9% compared to 2020 as carriers refused bookings to shippers in order to prioritize the repositioning of empty containers back to Asia instead of accepting cargo laden containers.

The hinterland network continues to feel the strain with a major impact to rail services across North America.

But expect rates to remain stable or increase only slightly over the current rate levels even though volumes are declining.

Asia to Latin America

Similar to previous months, the rates on the major South American trade-lanes are averaging approximately $13,280 per 40’ container. This is expected to remain stable or a small decrease due to an increase in capacity and a slight drop in demand.

A new service from East India and East Asia to the East Coast of South America is starting up and will add between 8 and 12 vessels of 5000 TEU, bringing additional relief to the rates.  

But the current market is still seeing extremely full vessels with a rolling situation until after the CNY at the earliest.

A 4-6 week booking window is a must. Carriers are encouraging the use of Non-Operating Reefers (NORs) as a substitute to regular equipment. The use of NORs can provide a solution for equipment challenges and may also provide a lower freight cost.

Intra-Asia

After a couple of months of stability, there has been a sudden surge in rates on the Intra-Asia market and it is expected that these increases will continue well into 2022.

The increases are caused by various factors, including disruptions and congestion at overseas ports, limited equipment for the Intra-Asia trade-lanes, lockdowns at Chinese ports and severe weather in the region.

Due to China’s strict zero Covid policy, restrictions were implemented in various Chinese ports, along the Yangtze River delta. There were also restrictions implemented with vessel crew changes and feeder vessels.

In addition to the issues in China, Malaysia is dealing with severe rainfall, creating flash flooding in several major ports.

Europe to Asia

Volumes from North Europe and the Mediterranean to Asia held up relatively well despite China’s ban on waste and recyclable products. Part of the increase in demand is due to stronger movement of motor vehicle parts and luxury goods, including wine.

Port congestion in the European ports is still a factor as productivity is greatly reduced. However, as carriers use alternative smaller ports, the congestion does appear to be easing.

Expect freight rates to remain stable or increase marginally in the coming weeks, averaging $2544 per 40’ container.

Europe / Med to NORAM

This traditionally stable trade-lane continues to see disruption with consistent growth (8% year-over-year) and high-rate levels.

The situation from the Med and North Europe to North America remains critical as capacity and port congestion continues. Carriers continue to implement blank sailings and port omissions, with very little notice.

The Port of Genoa (Italy) has released an announcement that, with immediate effect, they will stop accepting any bookings on the AL6 / Amerigo / MENA services, as well as the MEDUSEC and SAEC services. This booking stop is aimed at rationalizing the entry of export containers through the Terminal, so as to be able to dispose of the abnormal volume of exports accumulated in recent weeks in the yard and will remain in place until further notice.

Rates have maintained a steady rise in 2021, with the Westbound index reaching an average of $7000 per 40’ container. Expect rates rise again in Q1 of 2022 as port congestion continues.

JAS RESPONSE

The JAS World Ocean Team continues to work 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 by clicking the "Contact Us" button below for assistance.


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