Newsletter – August 26, 2021
AIR FREIGHT UPDATES
Air freight peak season has arrived a month early
Air freight’s annual autumn and winter peak season has arrived a month early, air freight forwarders and sources are reporting, due to a combination of factors including manufacturing production delays, ocean freight turmoil, and Covid-related air capacity reductions and regional lockdowns. Read more here.
Freighter flights resuming at Shanghai, but reduced capacity pushes rates higher
Freighter flights are slowly resuming at Shanghai Pudong Airport (PVG), but a reduced workforce means week-long cargo delays and fast-moving freight rates.
Last Friday, China’s drastic Covid policies caused widespread cargo disruption at PVG, after a positive Covid test at ramp handler Shanghai International Airport Services, resulting in hundreds of staff sent for testing or quarantine and mass flight cancellations. Read more here (login required).
OCEAN FREIGHT UPDATES
Union: Over 300 HMM Seafarers Resign as Pay Negotiations Continue
More than half HMM’s 600-strong seafarer workforce have quit following management refusal to meet pay demands.
Some 453 staff voted in the seafarers’ union strike ballot last weekend, more than 90% backing action in protest at a reluctance to give generous salary increases after a pay freeze between 2011 and 2019, due to the company’s poor performance in those years.
Meanwhile, the union said yesterday it would extend negotiations by a week, to 1 September. Read more here.
More than 40 ships waiting outside LA and Long Beach setting new record
The number of ships at anchor, waiting for berth space to open up at America’s two largest boxports has hit a new record today with more than 40 ships now forming queues further and further away from the terminals at Los Angeles and Long Beach.
The extraordinary congestion seen at America’s main two west coast ports is far worse than the port lockout days of 2002 and 2004. Read more here.
Are you familiar with the concept of terminal velocity? It refers to the steady speed achieved by an object freely falling through a gas or liquid and is achieved when the speed of a moving object is no longer increasing or decreasing. The current container shipping debacle feels just like that.
Did the story really start around Chinese New Year 2020? Just then, pandemic-induced lockdowns in China prevented Chinese workers coming back to work in China’s factories and ports. Read more here.
More new entrants ready for the booming transpacific
There’s another new entrant on the booming transpacific trades. Shanghai Jin Jiang Shipping (SJJ) will provide two 1,713 teu ships to the fleet of the TPX service operated by China United Lines (CULines), upping the service from fortnightly to weekly in the process. The service goes from Shanghai straight to Long Beach.
“The two Chinese carriers have ambitions to further increase their presence on the Transpacific,” Alphaliner noted in its most recent weekly report. Read more here.
INTERNATIONAL BUSINESS – GOVERNMENT UPDATES
World’s Supply Chain Problem Keeps Getting Worse
By Cindy Wang (Bloomberg) A supply chain crunch that was meant to be temporary now looks like it will last well into next year as the surging delta variant upends factory production in Asia and disrupts shipping, posing more shocks to the world economy.
Manufacturers reeling from shortages of key components and higher raw material and energy costs are being forced into bidding wars to get space on vessels, pushing freight rates to records and prompting some exporters to raise prices or simply cancel shipments altogether. Read more here.