Newsletter – May 23, 2023
AIR FREIGHT UPDATES
The US Government Spent $62 Billion To Save Airlines During the COVID-19 Pandemic
When the coronavirus pandemic took the world by storm in early 2020, businesses around the world struggled to stay afloat. The aviation industry was one of the worst hit, with airlines losing all their business and revenue streams almost overnight.
Most carriers had to start laying off employees to have any chance of survival. Thankfully, the US government came to the rescue and presented a lucrative aid package if carriers promised not to lay off or furlough personnel. Read more here.
OCEAN FREIGHT UPDATES
Shippers hold back on contracts amid uncertainty and ample capacity
A hazy outlook on how the market is going to develop, combined with currently ample ocean capacity, is causing shippers as well as logistics providers to postpone capacity commitments for the time being, according to executives of Seko Logistics. Read more here (login required).
Number of containers lost at sea falls to record low
A total of 661 containers were lost overboard in 2022, out of 250m transported, representing the lowest losses in percentage since the Washington-based liner lobby group, the World Shipping Council (WSC), started the survey in 2008.
The number is less than one-thousandth of 1% (0.00026%) of the containers currently shipped each year, with cargo transported valued at more than $7trn, WSC said. Read more here.
Severe Drought Forces Panama Canal To Impose Shipping Restrictions
A severe drought impacting the Panama Canal is compelling the container vessels to lighten loads and pay a higher rate, with further increases in the cost of shipping cargo via the canal expected this year in summer. Read more here.
Rate slide eases on transpac
Transpacific ocean spot rates continued to ease last week, with prices to the West Coast now down 18% from their GRI-driven mid-April climb. Some observers see early signs of a rate war in this retreat, and indeed, a smaller share of capacity has been removed in May compared to April even as rates have declined. Read more here.
INTERNTIONAL GOVERNMENT – BUSINESS UPDATES
Near-shoring takes another step as companies eye new markets
The Covid-19 crisis has accelerated the pace of trade diversification from China, bringing industry buzzwords like near-shoring, re-shoring or friend-shoring increasingly under the spotlight.
This market reconfiguration has, undeniably, boosted some of the emerging economies in South Asia, with Vietnam seen as the primary beneficiary because of its first-mover advantages. But other nations are catching up as opportunities grow. Read more here (login required).