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JAS RESPONSIVENESS

MARKET CONDITIONS

AIR

GLOBAL

  • After a few stable weeks global air cargo capacity decreased to a minus 29% the week of June 28th to July 4th compared to the same period in 2019.
  • All Trade-Lanes now show a reduced capacity. This is mostly due to the reduction of Freighter operations following the reduction of PPE shipments out of China.
  • Belly capacity is stable at minus 73-74% compared with the same period in 2019.


APAC

  • Reduced Air Freight PPE shipments out of China prompted some airlines to reduce ghost flights, nevertheless the current COVID situation in the AMERICAS and particularly in the USA may change that.
  • Steamship lines successful attempt to drive rates higher in the Transatlantic Trade-Lane reducing ocean capacity has forced some shippers to switch ocean shipments to air.

EMEA

  • Situation in and out of Europe is still critical especially in the Transatlantic lanes still at less than 50% last year’s capacity. Europe is slowly re-opening its borders and re-starting passenger flights accordingly, but not on the Transatlantic which will continue to see strong capacity constraint for the next few months.

AMERICAS

  • North/South route is stable with capacity almost back to last year levels.
  • Capacity in and out of LATAM both on the Transpacific and Transatlantic routes is still critical especially between Europe and LATAM.
  • The passenger airline industry in LATAM is suffering greatly, in the future cargo capacity to this part of the world will have to relay on the heavy contribution of Freighters.

JAS RESPONSE


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

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

Chartered flight operations from China to Europe

  • Weekly 747-8 Cargo from Shanghai PVG to Frankfurt FRA and Malpensa MXP (stopover as needed).
  • This service allows for delivery to 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 client needs.

Contact your closest JAS office for assistance.

OCEAN

​GLOBAL

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. 


APAC EXPORTS

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    

  • TPEB – Carriers have increased capacity in the TPEB trade lane by approximately 2500 TEU per week (or ~5%) through the end of October. US imports from all of Asia accelerated from 1.23 million TEU in June, to 1.5 million TEU in July, to 1.65 million TEU in August, according to PIERS, a JOC.com sister company within IHS Markit. That 450,000 TEU gain from June to August meant a 34 percent jump in imports over the summer
  • The rate levels on the TPEB continue to increase, as carriers have successfully managed supply and demand.  
  • FEWB to the Med – Capacity on this lane continues to be greatly reduced in the lead up to Golden Week at approximately 18% less than pre-Covid 19 capacity and even more so post Golden Week with up to 42% reduction in capacity. All vessels are 100% utilized with a roll-over pool established.  
  • FEWB to the Northern Europe – Capacity reductions on this lane is averaging around 13% per week. All vessels are booked at 100% utilization.  
  • Rates on the Asia – FEWB trade lane have more-or-less stabilized.
  • Asia to LATAM – There are minimal capacity reductions on the WCSA and ECSA trade lanes until Golden Week. But vessels are 100% full and bookings remain strong throughout the next 4 weeks. Carriers have stopped accepting bookings until week 40 in some cases.  
  • Rate levels are at an all time high, both to ECSA and WCSA. It is expected that levels will increase again effective Oct 1st, 2020. Again to LATAM, lead time for bookings is 4 – 5 weeks out.  

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.

EMEA EXPORTS

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

AMERICAS EXPORTS

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.

JAS RESPONSE


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.


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