Newsletter – April 23, 2021
AIR FREIGHT UPDATES
New lockdown and suspension of passenger flights hit Bangladesh exports
A capacity crunch, caused by the suspension of international passenger flights, has increased air freight rates out of Bangladesh by up to 30%, with a particular rise in Dhaka-US lanes.
As the Covid-19 situation worsened, Bangladesh’s government enforced a ‘hard-lockdown’ on 14 April and, since then, all regular passenger flights have been suspended. Read more here (login required). A capacity crunch, caused by the suspension of international passenger flights, has increased air freight rates out of Bangladesh by up to 30%, with a particular rise in Dhaka-US lanes. Read more here.
Indian carrier IndiGo plans to add freighters
Low-cost carrier IndiGo has revealed plans to bolster its cargo business through the addition of converted freighters.
The airline said it is in the process of sourcing four A321ceo aircraft, each of which will be converted from passenger jets to a full freighter configuration. Read more here.
Hong Kong loses cargo hub top spot to Memphis
The world’s largest cargo hubs saw demand increase last year despite the Covid outbreak, while US express hub Memphis surpassed Hong Kong to become the world’s largest cargo hub (full charts below).
Preliminary statistics from Airports Council International (ACI) show the the top ten air cargo hubs in 2020 saw volumes increase by 3% last year to 30.5m tonnes, while overall demand at airports was down 8.9% to an estimated 110 tonnes. Read more here.
Fed up with cargo congestion, freight forwarders flee O’Hare airport
Cargo congestion has gone from bad to worse at Chicago O’Hare International Airport, forcing importers to wait several days to retrieve shipments and prompting two large logistics companies to migrate airfreight operations an hour west to an uncrowded facility in Rockford, Illinois.
There is so much cargo piling up at O’Hare that airline-handling agents for the first time in memory are actually renting warehouses in surrounding townships to hold the overflow until it can be sorted for customer pickup, local trucking and logistics professionals say. Read more here.
OCEAN FREIGHT UPDATES
Freight forwarders call for end to Montreal job action
Canada’s freight forwarders expressed frustration at the growing backlog of cargo resulting from the partial strike at the Port of Montreal.
“In the same week the federal government committed tens of billions to stimulate the economy, a labour dispute in one of Canada’s most critical transportation hubs is acting to suppress economic growth,” said Bruce Rodgers, executive director of the Canadian International Freight Forwarders Association. Read more here.
Box lines firmly in control – charging ‘what they like’ on almost every trade
Container freight indices are on the rise again, but even at their highly elevated levels they mask the true cost of shipping.
For example, the Freightos Baltic Index (FBX) North European component jumped by 6% this week, to $7,791 per 40 ft – a huge 450% increase on the rate a year ago, but still unlikely to turn the heads of carriers that can easily fill ships with containers paying double that rate. Read more here (login required).
OOCL unveils ‘spectacular’ increases in first-quarter volumes and revenue
The scale of the improvement in the liner industry’s fortunes was laid bare today when OOCL released its first-quarter operational update showing its average revenue per container, across all trades, had increased 58.3%, year on year.
This was accompanied by a 28.3% year-on-year increase in volumes, which led to OOCL posting provisional Q1 21 revenue of $3bn, some 96% higher than its pandemic-afflicted first quarter of 2020. Read more here.
INTERNATIONAL BUSINESS – GOVERNMENT UPDATES
Warehouse rents rise, vacancies fall as import surge strains port markets
An ongoing import boom at U.S. ports is putting a strain on warehousing markets around seaports, according to a recent analysis from CBRE.
Port-city markets had a warehouse vacancy rate of 3.6% at the end of 2020, which was 1 percentage point lower than the national average, CBRE said. “The low amount of available supply has led to record-high rental rates,” CBRE said. Read more here.