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Ocean & airfreight update

     Ociean & Air Freight

Ocean Freight
As the Coronavirus (COVID-19) pandemic threw global markets into disarray, consumer behaviour altered dramatically, leaving carriers as well as shippers stranded, either with goods they could not sell, or, in the second half of the year, with goods that could not be moved.  The latter crisis stems in part from a lack of containers, as the pandemic has caused box repositioning problems.  Today, even if a shipper can get an empty container for their cargo, there is no guarantee that the cargo will make it onto a ship.

The latest findings show that most major ports saw high levels of rollover cargo from November to December.  This, in turn, is causing further delays to cargo which is stranded at origin ports.  Of twenty global ports that were monitored, 75% saw an increase in the levels of rollover cargo in December, compared to the previous month.  Major transshipment ports such as Port Klang, Malaysia and Colombo, Sri Lanka have recorded more than 50% of cargo delayed, with the largest delays coming from Singapore and primary ports such as Shanghai, China and Busan, South Korea, who rolled over more than a third of their containers last month.  Industry experts are cautioning that the cargo surge could last well into 2021, with a strong likelihood that the current equipment shortage and lack of space will continue throughout the first half of the year.

The critical lack of ocean containers and capacity for exports out of China, coupled with vessel schedule disruptions, is continuing to drive the shift to airfreight.  This is adding to a shortage of airfreight capacity already stretched by demand generated from PPE shipments and the e-commerce boom.  COVID vaccine transport is creating an extra squeeze in capacity, with a large number of inquiries and booking requests – mostly from Asia to Europe or the U.S..

Large air charter services in all directions are also experiencing a boom at the moment, including commodities that are not traditional charter commodities, such as raw materials.  Canada is upping its freighter capacity, with both Cargojet and Air Canada expanding to take advantage of new opportunities.  Cargojet has committed to purchasing multiple freighters for delivery from this year until 2023.  Air Canada, which has long toyed with the possibility of having its own freighter fleet, is in the process of converting several passenger aircraft into freighters, which are due to be entered into service later this year.

For more information, contact David Lychek, Manager – Ocean & Air Services.

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