M a r ke t

Insight

July 1st
MARKET NEWS
Biden signs OSRA-22 shipping reform into
law
On June 16, Joe Biden signed the Ocean Shipping
Reform Act (OSRA-22) into law. Biden said OSRA would
help alleviate congestion and inflation by going after
ocean carriers who he says have raised freight rates to
unreasonable levels.
Link to source
Le Havre port, an economic and ecological
missed opportunity
Port 2000, the new container port in Le Havre, was
commissioned in 2006 in the Seine estuary without
direct access for inland barges. As a result, only 10% of
containers now use the waterways.
Link to source
Order to cut flights at Schiphol 'a challenge'
and raises fears at other airports
News that the Dutch government on June 24 ordered
Schiphol to cut flight numbers by 12% next year has led
to fears other European airports may also face
reductions.
Link to source
Strike at Hamburg airport
On June 29, the German trade union Verdi called on the
technical staff at Hamburg Airport to go on strike on
Friday, just as school holidays in the region kick off,
adding to the existing industry-wide crunch.
Link to source
China’s first sea-rail automated container
terminal opens at Qinzhou
On June 28, China opened its first sea-rail intermodal
container terminal on Tuesday, the first phase of Beibu
Gulf Port Automated Container Terminal, spanning
berths 7 and 8 in the Dalanping area of Qinzhou port.
Link to source
European Parliament votes to include
shipping in Emissions Trading System
On June 22, MEPs voted to adopt three EU laws that
are part of the Fit for 55 in 2030 package, which aims to
cut greenhouse gas emissions (GHG) by at least 55%
by 2030 compared to 1990 levels, and to have net-zero
GHG emissions (climate neutrality) by 2050.
Link to source
KEY FINDINGS
Supply chain bottlenecks are helping to prop up
freight rates, but they are clearly not having quite the
same influence on pricing as they did previously, as
evidenced by falling spot rates over the past few
months. The situation is still bad enough to prevent a 104,762 -5% US$3.89
precipitous collapse in short-term rates, but it seems
that sentiment for the global economy and container Commercial flights flown Global international air Average rate in US$ per
demand is reasserting itself as a pricing driver. per day in 2022, vs. cargo capacity compared to kilo
87,910 in 2021 the last two weeks (stable from last week )
Things that might extend the supply chain recovery
timeline include China’s refusal to budge from its zero-
covid policy that, as we have seen, can create
disruption at any time, and the port labour contract
negotiations going on for the USWC, the main
gateway for US container imports.

Life in a high-inflation world increases the risk of

labour shortages arising from industrial action as new
wage demands pile up. Already, the logistics sector
has endured strike action (or threats) at German
35.0% 74 -3%
ports, railways in the UK, and by Korean truckers.
Schedule reliability in Cancelled sailings in the Industry-wide freight rates
Looking further ahead, we do foresee a significant April, slightly down next 4 weeks, 10% on all routes (compared
loosening of the container market from the second from March cancellation rate to last week)
half of 2023, when the supply chain congestion is
expected to have cleared. It will also coincide with a
significant influx of newbuild containerships.
AIR
FREIGHT
CHARGEABLE WEIGHT AND RATES

+1% -10% US$3.89 +17%

Worldwide chargeable weight Worldwide chargeable weight Average rate in US$ per kilo Average rate in US$ per kilo
compared to last week compared to last year (stable from last week ) compared to last year

Last five weeks Last two weeks compared with the preceding two weeks

Rates (US$) 2021 Chargeable weight 2021

Chargeable weight Rates including charges
Rates (US$) 2022 Chargeable weight 2022

Source : WorldACD
GLOBAL INTERNATIONAL AIR CARGO CAPACITY
 Global international air cargo capacity remained flat in the last two weeks (compared to the two weeks before that), with belly growth offsetting freighter
declines. Widebody belly air cargo capacity continues to catch up with the capacity offered by airline freighters.
 Shanghai PVG air cargo capacity has largely returned (-15% down on pre-lockdown levels, after air cargo capacity had fallen by around -70%), as the city
reopens. Airline freighters have recovered most absolute capacity and are only down -11% on pre-lockdown levels.
 Passenger-freighters have been widely used for dedicated charters on lanes with limited air cargo capacity. As an example, Australia’s COVID testing kits were
imported using ~40 passenger-freighter charters per week.

Direct air cargo capacity between Europe and Asia Pacific is still down -36% (Eastbound) and 50% (Westbound)
May 30 – June 12, 2022, vs 2019 levels
Significant re-routing of Asia-
Europe via the Middle East

S o u r c e : S e a b u r y
Global capacity net growth: -5%
Source : Seabury
GLOBAL INTERNATIONAL AIR CARGO CAPACITY EVOLUTION
Widebody belly air cargo capacity continues to catch up with capacity offered by airline freighters

International air cargo capacity, January 2020 – June 2022 VS. PREVIOUS
CAPACITY VS. 2019
Thousand tons per week TWO WEEKS

Total capacity -5% 0%

Airline freighters +17% -2%

Passenger belly
-33% +3%
Widebody aircraft only

Integrator freighters +39% -1%

S o u r c e : S e a b u r y

Source : Seabury
COMMERCIAL FLIGHTS TRACKER

104,762 16,615,778
Commercial flights flown per day in 2022, Commercial flights flown in 2022, 26%
vs. 87,910 in 2021 more than 2021

Number of commercial flights per day

2022 2021 2020 2019

Source : Flightradar24
SEA
FREIGHT
CONTAINER MARKET FORECAST - JULY
 Drewry expects ship capacity to rise in July when compared to June across major East-West trades.
 Spot rates are forecast to fall in July when compared to June across major East-West trades, despite a 4% rise on South Asia–Med. However, we expect
no major change in spot rates on the South Asia–North Europe trade lane.
 As Shanghai is gradually returning to normalcy after a two-month lockdown, followed by another partial lockdown announced on 10 June, the city is yet to
experience the post-lockdown export boom even though port congestion and inland transportation are improving systematically WoW.
 While exports from China are increasing gradually, we expect the upcoming traditional peak season to be flat this year due to uncertainties on a macro level
making it difficult to predict a surge into Western ports.

% change of spot freight rates

% change of effective capacity

Total cancelled sailings vs total

scheduled sailings

Source : Drewry % growth MoM

CANCELLED SAILINGS FORECAST – WEEKS 25 TO 29

Cancelled sailings by Alliance Percentage of cancelled sailings

800 760
10%

600

400
305

200 172.5
140 142.5

74
20 15 19 20
0
90%
2M Alliance Ocean Alliance THE Alliance Others Total

Total cancelled sailings Total scheduled sailings

Source : Drewry
EFFECTIVE CAPACITY FORECAST
 In July, cancelled sailings on the Transpacific Eastbound trade are likely to decrease from 32 to 28 YoY on the West Coast and are expected to rise from 6 to
10 YoY on the East Coast.
 During the same period, the Transatlantic trade will experience a fall in cancelled sailings, from 5 to 2 YoY from North Europe, and 3 to 1 from the Med.
 In terms of effective capacity, the Asia-ECNA trade will rise in July by 6% YoY and Asia-WCNA trade will decline by 18% YoY. During the same period,
capacity on Asia-North Europe will decrease by 8% and on Asia-Med by 22%. We also expect an increase of 6% YoY on the Med-North America trade lane
while a fall of 5% on North Europe-North America

East – West major trades South Asia – North Europe and Med
TEU TEU
2,000,000

1,750,000

1,500,000

1,250,000

1,000,000

750,000

500,000

250,000

Source : Drewry
GLOBAL SCHEDULE RELIABILITY
 Global schedule reliability seems to continue to follow the trend seen in 2021, with schedule reliability within a small range but at a slightly lower base.
Schedule reliability declined by -1.3 percentage points MoM in April 2022 and was down Y/Y by -4.7 percentage points.
 This is the first time that the delay figure has dropped below the 7-day mark since August 2021. That said, it continues to be the highest across each month
when compared historically.

Global schedule reliability Global average delays for late vessel arrivals
% Days
90% 9
80% 8
70% 7 6.41 days
60% 6
50% 5
40% 4
30% 3
20%
35% 2
10% 1
0% 0

2018 2019 2020 2021 2022 2018 2019 2020 2021 2022

Source : Sea Intelligence

TRADE CAPACITY OUTLOOK
Capacity outlook by trade lane
Thousand TEUs, by week

500
TRADE LANE UPCOMING 12 WEEKS
450
Asia – North Europe 15.3%
400
Asia – Mediterranean 23.5%
350
Asia – NAEC 39.2%
300
Asia – NAWC 29.6%
250
Asia – SAEC 14.5%
200
NAEC – SAEC -0.4%
150 North Europe –SAEC 5.6%
100 North Europe – NAEC 15.5%
50 Mediterranean – NAEC 26.9%

0 Europe – NAWC -6.2%

W23 W24 W25 W26 W27 W28 W29 W30 W31 W32 W33 W34
Asia – North Europe Asia - Mediterranean Asia - NAEC
Asia - NAWC Asia - SAEC NAEC - SAEC
North Europe -SAEC North Europe - NAEC Mediterranean -NAEC
Europe - NAWC

Source : Sea Intelligence

WORLDWIDE PORT CONGESTION
Waiting time for berth as of June 30th
Hours

Source : Bolloré Logistics

Usual traffic Congested Highly congested
Check the interactive map on Tableau here : MAP
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