Author: Admin

By Damian Brett

Shipping giant AP Moller Maersk has launched its new air cargo business as it looks to meet customer demand for supply chain security.

The company, which owns the world’s largest container shipping line, said that its new Maersk Air Cargo business will be operational in the second half of the year and will utilise Denmark’s Billund Airport as its main hub and offer daily flights.

The new airfreight company is the result of the existing in-house aircraft operator, Star Air, transferring its activities into Maersk Air Cargo.

Last year, the company announced that it had purchased two new B777 Freighters to be delivered by Boeing in 2024 and leased three B767-300 Freighters which will be operational next year through Cargo Aircraft Management, the leasing arm of ATSG.

The B767 freighters will be utilised on US-China operation the company said.

Maersk’s ambition is to have approximately one third of its annual air tonnage carried within its own controlled freight network.

This will be achieved through a combination of owned and leased aircraft, replicating the structure that the company has within its ocean fleet.

The remaining capacity will be provided by strategic commercial carriers and charter flight operators.

The decision to launch an air cargo business comes as supply chains face continual disruption as a result of Covid lockdowns, port logjams and the Ukraine crisis.

Airfreight has provided some relief to companies looking to move urgent cargo to maintain supply chains.

Aymeric Chandavoine, global head of logistics and services at AP Moller–Maersk, said: “Airfreight is a crucial enabler of flexibility and agility in global supply chains as it allows our customers to tackle time-critical supply chain challenges and provides transport mode options for high value cargo.

“We strongly believe in working closely with our customers. Therefore, it is key for Maersk to also increase our presence in the global air cargo industry by introducing Maersk Air Cargo to cater even better for the needs of our customers.”

Torben Bengtsson, global head of air & less than container load, AP Moller–Maersk, added: “Maersk Air Cargo is an important step of the Maersk Air Freight strategy, as it will allow us to offer customers a truly unique combination of air freight integrated with other transport modes.

“We see an increased and continued demand for air cargo both today and going forward as well as a growing demand for end-to-end logistics, why it is important for us to strengthen our own-controlled capacity and advance further on our air freight strategy.”

The company said that Maersk Air Cargo also hopes to enter into an agreement with the Flight Personnel Union (FPU) which is a part of the Danish Confederation and Trade Unions (FH).

Jan Hessellund, chief executive of Billund Airport, said: “We have had growth, defied the corona and set a new record year in cargo in 2021. It does not happen without good partners, and we do what we can to make our partners good.

“Now Maersk Air Cargo enters the stage at Billund Airport and raises it a notch. We are incredibly proud that we are being chosen as Maersk’s European hub for air freight, and we look forward to developing the collaboration to even new heights.”

As well as investing in air cargo, the shipping company has also been adding to its forwarder network, recently acquiring Senator International which has a large presence in the air cargo market.

It followed this deal up with the purchase of Pilot Freight Services, another forwarder with a strong presence in air cargo.

Rival shipping line CMA CGM has also launched an air cargo business and became one of the first companies to order Airbus’ recently launched A350 freighter.

Geneva – The International Air Transport Association (IATA) announced passenger data for March 2022 demonstrating that the recovery of air travel continues. Impacts from the conflict in Ukraine on air travel demand were quite limited overall while Omicron-related effects continued to be confined largely to Asian domestic markets.

Note: We have returned to year-on-year traffic comparisons, instead of comparisons with the 2019 period, unless otherwise noted. Owing to the low traffic base in 2021, some markets will show very high year-on-year growth rates, even if the size of these markets is still significantly smaller than they were in 2019.

•             Total traffic in March 2022 (measured in revenue passenger kilometers or RPKs) was up 76.0% compared to March 2021. Although that was lower than the 115.9% rise in February year-over-year demand, volumes in March were the closest to 2019 pre-pandemic levels, at 41% below.  

•             March 2022 domestic traffic was up 11.7% compared to the year-ago period, far below the 59.4% year-over-year improvement recorded in February. This largely was a result of the Omicron-related lockdowns in China. March domestic RPKs were down 23.2% versus March 2019.

•             International RPKs rose 285.3% versus March 2021, exceeding the 259.2% gain experienced in February versus the year-earlier period. Most regions boosted their performance compared to the prior month, led by carriers in Europe. March 2022 international RPKs were down 51.9% compared to the same month in 2019.

“With barriers to travel coming down in most places, we are seeing the long-expected surge in pent-up demand finally being realized. Unfortunately, we are also seeing long delays at many airports with insufficient resources to handle the growing numbers. This must be addressed urgently to avoid frustrating consumer enthusiasm for air travel,” said Willie Walsh, IATA’s Director General.

March 2022 (% year-on-year)     World share1     RPK        ASK        PLF (%-pt)2         PLF (level)3

Total Market      100.0%  76.0%    46.0%    12.7%    74.7%

Africa    1.9%      76.4%    46.8%    11.0%    65.7%

Asia Pacific          27.6%    -17.9%  -14.9%  -2.3%     64.2%

Europe 24.9%    246.9%  162.8%  17.9%    73.9%

Latin America     6.5%      119.8%  94.3%    9.4%      80.8%

Middle East        6.5%      221.1%  88.5%    29.6%    71.8%

North America  32.6%    96.5%    48.6%    20.5%    83.9%

1% of industry RPKs in 2021   2year-on-year change in load factor   3Load Factor Level

 International Passenger Markets

•             European carriers continued to lead the recovery, with March traffic rising 425.4% versus March 2021, improved over the 384.6% increase in February 2022 compared to the same month in 2021. The impact of the war in Ukraine has been relatively limited outside of traffic to/from Russia and countries neighboring the conflict. Capacity rose 224.5%, and load factor climbed 27.8 percentage points to 72.7%.

•             Asia-Pacific airlines had a 197.1% rise in March traffic compared to March 2021, up over the 146.5% gain registered in February 2022 versus February 2021. While China and Japan remain restrictive to foreign visitors, other countries are becoming more relaxed, including South Korea, New Zealand, Singapore, and Thailand. Capacity rose 70.7% and the load factor was up 24.1 percentage points to 56.6%, the lowest among regions.

 •            Middle Eastern airlines’ traffic rose 245.8% in March compared to March 2021, an improvement compared to the 218.2% increase in February 2022, versus the same month in 2021. March capacity rose 96.6% versus the year-ago period, and load factor climbed 31.1 percentage points to 72.1%.

•             North American carriers experienced a 227.8% traffic rise in March versus the 2021 period, slightly down on the 237.3% rise in February 2022 over February 2021. Capacity rose 91.9%, and load factor climbed 31.2 percentage points to 75.4%.

•             Latin American airlines’ March traffic rose 239.9% compared to the same month in 2021, little changed from the 241.9% increase in February 2022 compared to February 2021. The region benefitted from the end of bankruptcy procedures for some of the main carriers based there. March capacity rose 173.2% and load factor increased 15.8 percentage points to 80.3%, which was the highest load factor among the regions for the 18th consecutive month.

•             African airlines had a 91.8% rise in March RPKs versus a year ago, improved compared to the 70.8% year-over-year increase recorded in February 2022 compared to the same month in 2021. Air travel demand is challenged by low vaccination rates on the continent as well as impacts from rising inflation. March 2022 capacity was up 49.9% and load factor climbed 14.1 percentage points to 64.5%.

Domestic Passenger Markets

March 2022 (% year-on-year)     World share1  

RPK        ASK        PLF (%-pt)2         PLF (level)3

Domestic             62.4%    11.7%    1.5%      7.3%      79.2%

Australia              0.8%      26.3%    17.6%    4.9%      71.5%

Brazil     1.9%      99.1%    67.5%    12.6%    79.1%

China P.R.            17.8%    -59.1%  -50.6%  -12.9%  62.0%

India      2.2%      32.3%    9.4%      14.3%    82.3%

Japan    1.1%      47.0%    54.6%    -2.9%     56.1%

US          25.6%    70.3%    34.4%    18.4%    87.2%

1% of industry RPKs in 2021   2year-on-year change in load factor 3Load Factor Level

•             China’s domestic traffic was down 59.1% in March, compared to March 2021, which was a large reversal compared to the 32.8% year-over-year growth recorded in February. This was owing to the drastic lockdowns and travel restrictions following the spread of Omicron in the country.

 •            India’s domestic RPKs rose 32.3% year-on-year in March, strongly reversing the 2.4% decline in February versus the prior year.

2022 vs 2019

March’s strong growth in most markers compared to a year ago, is helping passenger demand catch-up to 2019 levels. Total RPKs in March were down 41.3% compared to March 2019, an improvement compared to the 45.5% decline recorded in February versus the same month in 2019. The domestic recovery continues to outpace that of international markets despite the setback in China.

March 2022 (% ch vs the same month in 2019)    World share in1                RPK        ASK        PLF (%-pt)2         PLF (level)3

Total Market      100.0%  -41.3%  -35.5%  -7.3%     74.7%

International      37.6%    -51.9%  -45.2%  -9.9%     71.0%

Domestic             62.4%    -23.2%  -18.4%  -5.0%     79.2%

The Bottom Line

 “The ongoing recovery in air travel is excellent news for the global economy, for friends and families whose forced separations are being ended, and for the millions of people who depend on air transport for their livelihoods. Unfortunately, some government actions are emerging as key impediments to recovery. This is demonstrated most dramatically in the Netherlands.

Schiphol airport is being allowed by the regulator to repay itself on the back of airlines and consumers for COVID-19 losses with a 37% hike in airport charges over the next three years. Simultaneously, the airport has asked airlines to cancel bookings and new sales this week, at huge inconvenience to passengers, claiming shortfalls in airport staffing, including government provided security functions. And the government itself is planning to increase passenger taxes by EUR400 million annually with the stated purpose of discouraging travel.

Seeing the Dutch government work to dismantle connectivity, fail to provide critical airport operational resources and enable price gouging by its hub airport is a destructive triple whammy. These actions will cost jobs. They will hurt consumers who already struggling with price inflation. And they will deplete resources that airlines need to achieve their Net Zero sustainability commitment. The Dutch government has forgotten a key lesson from the COVID-19 crisis which is that everyone’s quality of life suffers without efficient air connectivity. It must reverse course, and others must not follow their terrible example. To secure the recovery and its economic and social benefits, the immediate priority is for governments to have plans in place to meet expected demand this summer. Many people have waited two years for a summer holiday – it should not be ruined through lack of preparation,” said Walsh.

Air cargo capacity out of Shanghai has been reduced to just a third of its level last year in response to the city wide lockdowns that have caused production to grind to a halt.

The latest statistics from Accenture’s Seabury Consulting show that in the first two weeks of April, cargo capacity from Shanghai Pudong (PVG) is 66.4% down on the same period in 2021.

Looking at how capacity has been reduced since the start of the lockdown, weekly cargo capacity between April 11-17 was 62.3% lower – at 15,800 tonnes – than the 41,900 tonnes recorded March 21-27.

Most of the reduction has come from non-Asia Pacific-based airlines which have reduced their capacity over that period by 75.7% to 4,100 tonnes.

Asia Pacific-based airlines have reduced their capacity by 53.4% to 11,700 tonnes.

The drop in capacity comes as airlines have reacted quickly to reduced production levels out of Shanghai due to the strict lockdown. Truck capacity has also come under pressure.

Where they can, companies have moved cargo through other Chinese hubs, although there have been reports that this has caused congestion at these airports.

Looking ahead, production around Shanghai is slowly beginning to come to life as hundreds of facilites have been able to restart work in an isolated closed-loop environment.

The first logistics providers are also being issued with passes allowing them to restart work.

Meanwhile, overall cargo capacity on a global basis was 6% down on pre-Covid levels April 4-27, according to Seabury.

The most notable drop comes on services from Asia to Europe with capacity down by 53% in the headhaul direction as a result of war in Ukraine and the Shanghai reduction.

China anticipates 77% drop in passenger traffic during Golden Week

By : Vyte KlisauskaiteVYTE KLISAUSKAITE

Chinese carriers anticipate a 77% year-on-year decrease in air passenger traffic during the Labour Day holiday period, according to the Civil Aviation Administration of China (CAAC).

During Golden Week, Chinese carriers are expected to carry just 2 million passengers (approximately 400,000 passenger per day), Liang Nan, director of the Transportation Department of the CAAC, announced during a press conference on April 28, 2022.

The negative forecast was attributed to low “willingness” to travel following the “severe and complicated” COVID-19 pandemic situation in China.

The Labour Day holiday in China, also known as the Golden Week period, begins on April 30 and ends on May 4, 2022. Golden Week in China is usually considered a busy and lucrative travel period for the country’s carriers. 

Passenger traffic numbers in March 2022 dropped 69% year-on-year, said Wu Shijie, deputy director of Aviation Safety Office of CAAC.

In March 2022, China’s Big Three airlines – Air China, China Southern Airlines (ZNH), and China Eastern Airlines (CIAH) (CEA) – saw the lowest passenger numbers since the beginning of the COVID-19 pandemic in 2020. The steep plunge in passenger traffic was attributed to the rapid spread of the Omicron variant and stringent quarantine measures across the country.  

China is considered to be one of the strictest places in the world in terms of quarantine requirements and travel restrictions resulting from the COVID-19 pandemic. As part of the country’s strict Zero-COVID policy, millions of people in China have been placed under lockdown.  

14 / 04 / 2022

By Rebecca Jeffrey

Shanghai lockdown measures that are impacting airfreight operations in the city and putting pressure on supply chains are expected to continue for the next two to three weeks.

This is according to Flexport, which warned that although there is light at the end of the tunnel for Shanghai, cities near Shanghai are also seeing a rise in Covid cases and some areas have begun implementing similar lockdown measures.

“Due to the limited availability of trucking resources, trucking rates are at high levels and seeing delays of around three to five days in pick up times. More than 80% of commercial freighter services have been cancelled and airlines are looking into potentially shifting operations to nearby airports,” added the supply chain specialist on April 12.

Air Cargo News recently reported that operations at Shanghai Pudong International Airport (PVG) remain constrained.

Looking at South China, Flexport said that ex-Hong Kong flight frequency has “still not recovered” due to the impact of pandemic quarantine measures and disruption to flight schedules due to the Ukraine crisis, however, “demand is improving since lockdown measures were lifted in Shenzhen”.

Cross-border trucking capacity is still around 20% of the original capacity, while the ex-Shenzhen market demand is improving but is highly affected by cross-border trucking capacity.

Some shipments from Shanghai are also being re-routed to Shenzhen, and airfreight rates have increased compared to the week before. Flexport added.

It said Taiwan’s market demand is relatively stable, but transit demand has “dropped significantly”, partly due to the Shanghai Pudong Airport operating constraints.

Meanwhile in Europe, capacity remains a concern. “Freighter capacity is heavily reduced and booking to uplift window is approx 10-14 days,” said Flexport.

“Deferred routings are still providing a viable routing option if already tight lead times can take it. We also see cheaper options on the market to secondary hubs where airlines have regular passenger flights.”

It added that rates are high but stable due to capacity constraints. Jet fuel prices, exacerbated by longer flight times to avoid Russian and Ukraine airspace, have started to drop, however Flexport said “the benefits will not be passed on till the market stabilizes”.

Norman Global Logistics said in an update on April 13 that due to the Shanghai lockdown operating restraints “airline handling has become almost impossible, due to lack of staff”.

The company added that many factories and warehouses are closed, while major reductions in trucking capacity is being caused by a shortage of drivers unable to reach workplaces or not able to cross borders; delays and shortages caused due to mandatory PCR tests; extended waiting times at cargo facilities; and restrictions on highways networks and cross border areas.

Dimerco added on April 11: “Traffic control for road transportation is getting more strict now.”  It said that cross-border trucking capacity continues to be very limited and a Shenzhen-Hong Kong freighter service has been launched in response to this capacity drop, although did not provide any more details on this service.

Valius VenckunasVALIUS VENCKUNAS

Travel chaos is an inevitable consequence of almost every holiday. During some holidays, the impact on the travel industry is minimal, but during others, it can be far more disruptive. 

This year, however, holidaymakers have already seen their Easter plans thrown into disarray. With warnings of further travel disruptions still to come, Easter 2022 could possibly be one of the most disruptive periods to date, with record traffic numbers, staff shortages and COVID-related absences all adding to the chaos. 

Usually, flight cancellations during the Easter holiday season are caused by one specific reason, rather than multiple events. For example, in 2021 the Easter period coincided with Delta Airlines (DAL), one of the largest American carriers, facing crew shortages due to several factors, including staff members reporting side effect following their COVID-19 vaccinations. Other airlines, particularly in Europe, managed to avoid the same fate, and the wave of flight cancellations were specific to Delta. 

In 2019, cancellations in Europe were largely confined to Spain, as the country faced widespread strike action by airport employees. In the US, severe storms disrupted schedules in multiple states, resulting in more than 1000 cancellations across the Eastern coast, while the remainder of the US was unaffected. 

2018 saw one of the worst Easters in aviation for decades, as travel in Europe was paralyzed by Eurocontrol system failures. In the US, a cyclone, dubbed ‘nor’easter’, led to thousands of cancelations during the week before the festive weekend.

Unprecedented chaos 

In 2022, however, it seems that many of these factors have combined to cause unprecedented chaos. And with the Easter weekend just a few days away, many European countries have already been reporting a surge in cancellations unlike anything the industry has experienced before. 

In the United Kingdom, airports have been impacted by a spike in COVID-related absences, resulting in delays and cancellations. The disruption is showing little sign of coming under control before the Easter weekend, as British Airways and easyJet, the nation’s two largest carriers, continue to suffer as a result of staff shortages and the resulting disruptions. 

Additionally, many popular holiday destinations, such as Spain and Malta, have scaled back restrictions ahead of the Easter break. Since then, Spain announced that it would be expanding its public transport schedules to cope with the increased demand, as well as the possible spillover of the chaos seen at UK airports. 

However, Spain and Portugal are still reeling from the aftermath of historic storms, with disruption expected to last for weeks to come. 

Strike action, standstills and staff shortages 

The outcome of strike action looms larger still with airport staff in at least five European countries, many of which are considered major travel destinations, having organized or announced strikes in the days leading up to Easter. 

A union strike by Italy’s air traffic control (ATC) workers is expected to have minimal effect on travel due to its short duration and preemptive measures to mitigate its impact, implemented by Spanish authorities. Similarly, unprecedented walkouts of German airport workers, which resulted in thousands of flights cancellations during the last week, appear to have led to agreements and a return to schedule. However, German airports have still reported a shortage of workers, warning that the numbers are inadequate to manage the surge in travelers during the Easter period. 

However, the impact of strike action by air traffic controllers in Poland is expected to be far greater. Conflict between ATC workers and the Polish Air Navigation Services Agency (PANSA) has resulted in staff shortages across the country’s airports leading to an unprecedented number of flight delays and cancellations. Alongside an increase in travel associated with the relaxing of COVID-19 restrictions and the wider effect of the war in Ukraine, the ongoing strike action has prompted Poland’s Civil Aviation Authority to issue a warning to passengers that the difficulties could continue. 

In Portugal, airport security companies, alongside baggage handlers from at least one major airport, called for strikes leading up to Easter. Similarly, an indefinite strike notice was issued by a Belgian trade union to Ryanair management in Dublin on behalf of the Belgium-based cabin crew of the low-cost airline. Lastly, Heathrow cargo handlers have also threatened to strike, a development that could bring air transportation in the UK to a near standstill.

Trade unions across Europe say the strikes are a response to major blunders in post-pandemic policy and planning that has resulted in airports being understaffed and employees overworked and underpaid. If true, this could be as devastating as the pandemic itself, at least in the short term. However, it is too early to tell if these factors will result in the worst Easter in the history of air travel. But, so far, the signs suggest that it could well be the case, as thousands of travelers face the possibility of spending a significant part of their Easter break stranded in European airports.

By Damian Brett

Shipping giant AP Moller Maersk has launched its new air cargo business as it looks to meet customer demand for supply chain security.

The company, which owns the world’s largest container shipping line, said that its new Maersk Air Cargo business will be operational in the second half of the year and will utilise Denmark’s Billund Airport as its main hub and offer daily flights.

The new airfreight company is the result of the existing in-house aircraft operator, Star Air, transferring its activities into Maersk Air Cargo.

Last year, the company announced that it had purchased two new B777 Freighters to be delivered by Boeing in 2024 and leased three B767-300 Freighters which will be operational next year through Cargo Aircraft Management, the leasing arm of ATSG.

The B767 freighters will be utilised on US-China operation the company said.

Maersk’s ambition is to have approximately one third of its annual air tonnage carried within its own controlled freight network.

This will be achieved through a combination of owned and leased aircraft, replicating the structure that the company has within its ocean fleet.

The remaining capacity will be provided by strategic commercial carriers and charter flight operators.

The decision to launch an air cargo business comes as supply chains face continual disruption as a result of Covid lockdowns, port logjams and the Ukraine crisis.

Airfreight has provided some relief to companies looking to move urgent cargo to maintain supply chains.

Aymeric Chandavoine, global head of logistics and services at AP Moller–Maersk, said: “Airfreight is a crucial enabler of flexibility and agility in global supply chains as it allows our customers to tackle time-critical supply chain challenges and provides transport mode options for high value cargo.

“We strongly believe in working closely with our customers. Therefore, it is key for Maersk to also increase our presence in the global air cargo industry by introducing Maersk Air Cargo to cater even better for the needs of our customers.”

Torben Bengtsson, global head of air & less than container load, AP Moller–Maersk, added: “Maersk Air Cargo is an important step of the Maersk Air Freight strategy, as it will allow us to offer customers a truly unique combination of air freight integrated with other transport modes.

“We see an increased and continued demand for air cargo both today and going forward as well as a growing demand for end-to-end logistics, why it is important for us to strengthen our own-controlled capacity and advance further on our air freight strategy.”

The company said that Maersk Air Cargo also hopes to enter into an agreement with the Flight Personnel Union (FPU) which is a part of the Danish Confederation and Trade Unions (FH).

Jan Hessellund, chief executive of Billund Airport, said: “We have had growth, defied the corona and set a new record year in cargo in 2021. It does not happen without good partners, and we do what we can to make our partners good.

“Now Maersk Air Cargo enters the stage at Billund Airport and raises it a notch. We are incredibly proud that we are being chosen as Maersk’s European hub for air freight, and we look forward to developing the collaboration to even new heights.”

As well as investing in air cargo, the shipping company has also been adding to its forwarder network, recently acquiring Senator International which has a large presence in the air cargo market.

It followed this deal up with the purchase of Pilot Freight Services, another forwarder with a strong presence in air cargo.

Rival shipping line CMA CGM has also launched an air cargo business and became one of the first companies to order Airbus’ recently launched A350 freighter.

By Rebecca Jeffrey

Operations at Shanghai Pudong International Airport (PVG) remain constrained as it largely handles pre-lockdown air cargo and supply chain operations are still limited.

This is according to the latest advisory from UK-based logistics, freight forwarding & supply chain specialist Woodland Group.

Commenting on how Shanghai is coping with its extended Covid lockdown, Woodland said PVG is “open and operational” but added “freight being handled is mainly clearing of cargo that was delivered pre-lockdown”.

The airport continues to see the impact of the city-wide lockdown in Shanghai, with Woodland noting there is a “shortage of trucks available to deliver cargo to the airport”.

Efforts to keep the workforce active at the airport include some terminals provided sleeping facilities, however with a number of workers locked down at home there is still an operational impact, added Woodland.

Meanwhile Shanghai-headquartered electric vehicle company Nio said it was suspending production and delaying delivery of its cars after suppliers in Shanghai, Jiangsu and Jilin stopped production due to the pandemic.

Guangzhou has also enforced new Covid restrictions after cases rose in the city. This is expected to hit the automotive, petrochemical, and, electronics industries based in Guangzhou, further adding to supply chain delays and bottlenecks.

The airfreight industry is continuing to monitor capacity and rates, prompting UK-based Westbound Logistics Services to assesses whether the industry should prepare for high rates to be the new normal.

Westbound said that even if the wider world can meet the challenges presented by the pandemic, “it is impossible to see everything returning back to pre-covid levels in the next couple of years, if at all”.

It added: “To hang on to a hope of significant rate reductions in the short to medium term is almost certainly a flawed business strategy”.

The Asia market, to both Europe and North America, has been the most affected by airfreight rates in the past two years.

In addition to Covid, supply factors contributing to the high rate levels include port congestion, equipment turnaround and schedule disruption. “For example, Northern China is currently experiencing a higher degree of equipment shortages and therefore rates are significantly higher than the rest of China,” said Westbound.

It added: “Demand may also impact rates levels as we move forward in the months to come, these include a lack of low value product volumes, alternative sourcing and inflation.”

To add to this, North America is battling both port and warehouse congestion, while European trade is still seeing the fallout from Brexit.

Dimerco added on April 11 that road transport truck control is getting stricter which is making it “difficult to secure trucks to bring freight to Shanghai or alternative airports”.

It added: “For air import into Zhengzhou (CGO), freight with customs transfer to PVG will not be accepted from April 11 onward. All import shipments with a final destination at PVG (Shanghai) need to be custom cleared at CGO airport.”

The company said its Shanghai export operations are suspended and shipments in and out of the warehouse are suspended. On-hand cargo will go to PVG but will be exported via other airports, including Guangzhou, Shenzhen and Beijing. A back-up warehouse is operating for cargo that has reached Shanghai.

Dimerco’s import warehouse is locked down and trucks are not allowed t0 enter. A very limited number of trucks with a “green pass” are allowed to pick up cargo.  Cargo on-hand cannot be operated.

The city of Shanghai has entered the first of a two stage lockdown due to an

increase in Covid cases, which is expected to lead to more delays on both

ocean and air freight.

The city of Shanghai has entered the first of a two stage lockdown due to an increase in Covid cases, which is expected to lead to more delays on both ocean and air freight.

In what is widely considered to be China’s most drastic measures since the outbreak of the pandemic, the eastern side of the city is now in lockdown until Friday, with the western side following suit between 1st and 5th of April.

The port and the airports remain open, but strict rules for trucking have already led to a lack of available transport, which is impacting LCL, FCL and Air freight movements.

The lockdowns have led to factories and businesses being closed down, public transport being halted and office staff working from home.

It is possible that delays will be incurred, to and from the region, for the next couple of weeks.

Westbound are continuing to monitor the situation closely and suggest that customers contact us before arranging any urgent shipments.

On the flip side, lockdowns and restrictions have eased in the Shenzhen area during the past week or so. While congestion is still affecting logistics, the ports are starting to return towards normal.

At Westbound Logistics we pride ourselves in offering personalised and tailored logistics solutions. To find out more please call 01375 800800 or email info@westboundglobal.com.

The outlook on U.S. logistics is grim to say the least. Despite efforts to help ease congestion and increase workflow, the volume that ports, rails, and warehouses are dealing with is unprecedented. The infamous congestion seen at Los Angeles and Long Beach has yet to be dampened, and now the list of nearly impossible ports has grown with the addition of Houston and Charleston. Along the East Coast trucking insufficiencies are mounting and rates are soaring. International importers are scrambling to use alternate ports to avoid the mayhem at the mega hubs, however this activity is rerouting truckers and creating equipment imbalances, prolonged timelines, and increased rates. Needless to say, there has yet to be improvement in recovering from the aftermath of the logistic nightmare since the onset of COVID in early 2020.

Updates in Southern California

LA/LGB are still facing extreme congestion and related issues. Vessels wait weeks for appointments to berth, and truckers are typically booked for 5-7 weeks in advance. It is not uncommon for trucking companies to turn down new requests even with ample advanced notice due to a lack of resources. As of Friday, LA/LGB port began assessing yet another new fee to help encourage clean trucking. The new $10/TEU fee is not intended to deter shippers from the port, but rather use the funds to help build a better, cleaner process. Though efforts are in place to build a brighter future, it adds yet another layer of expense to an already over-inflated and costly endeavor for the necessity of removing containers from the port.

Gulf State Delays

In early 2022, Gulf states boasted less-congested ports and the ability to alleviate the volume seen in SoCal’s ports. However, perhaps the efforts to reroute cargo have been too popular, as now Houston is a hotspot for congestion, lack of trucking, and extended timelines. Imports were 40% of business in Houston, but in Q1 it was closer to 70%. The shift in operations is causing equipment imbalances with not enough chassis to match container need; this means that cargo waits longer, trucking gets backed up, and the whole system starts to see a bullwhip effect of inefficiencies.

Charleston is no stranger to the same trend seen in Houston, as this East Coast port, like its peer in Norfolk, Savannah, and Baltimore are experiencing an increase in import demand and lack of infrastructure and processes to appropriately handle the volume. The American Trucking Association claims 70% of U.S. freight is moved by trucks. With a number this high, it is clear why rates have become extremely volatile and subject to the supply and demand curve more than other shipping modes. The recent rise in fuel cost also impacts the ever-growing trucking rates, as the world is still reeling in the Ukraine / Russian War, as well as other global events wreaking havoc on the global supply chain.