Monthly Freight Market Updates

October 2021

The Top Story of the Month

The fourth quarter of 2021 brings with it more challenges, for starters, it’s China’s October Golden Week, Christmas, and Chinese New Year that will retain a firm hold on container shipping demand. But despite supply constraints, port congestion, service delays are likely to create difficult conditions to operate in.  

Another trend we saw was the redeployment of capacity to more profitable East-West trade by the top 14 Carriers, removing capacity from the Far East – Middle East trade route. 

Empty containers are being relocated like never before; 215,000 containers will be repositioned into India in the first eight months of 2021 to boost economic growth. 

New Containers Production – Since July 2020, 660,000 additional containers have been added to the fleet, assisting in alleviating the container deficit and filling in for containers that have become stranded in the ecosystem due to port congestion and driver shortages. 

Keys

SignMeaning
++Strong Increase
+Moderate Increase
=No Changes
Moderate Decline
Strong Decline

Ocean Freight Market Updates October 2021 United Arab Emirates

The Ocean Outbound Updates

Ocean Freight Market Updates October 2021 United Arab Emirates

Middle East→ North America

One line Status Space on the U.S West Coast may be accessible with the prior booking to Los Angeles, but it is extremely restricted in Oakland and the Pacific Northwest. Furthermore, GRIs have been announced; carriers will take port-to-port freight as a priority. Spot rates are rising month over month

Local Rates Increased (+)
Local Space Very Critical (–)
Local capacity/Equipment Limited but available on selected carrier (-)

Notes: Bookings need to be made 3-4 weeks in advance

Middle East → Latin America

One line Status Carrier options are limited to the East and West Coasts of South America; it is recommended to reserve 4 weeks in advance for Central America. Spot rates are rising month over month. Premium rates are being pushed and congestion at transshipment ports.

Local Rates The prices are increasing generally (++)
Local Space Very tight (–)
Local capacity/Equipment (-)

Notes: Bookings need to be made at least 4 weeks before

Middle East → Europe

One line Status Increasing transshipment volumes from China/Far East via UAE pose space problems. Changes in service by several carriers are causing space difficulties from the Middle East to North/West Europe.

Local Rates No increase since September 2021 (+)
Local Space Very Critical (–)
Local capacity/Equipment Equipment is available but reservations are restricted, but available on a premium on the specified carrier (-)

Notes: Bookings must be made 3-4 weeks in advance to secure

Middle East → Oceania

One line Status Space is relatively available with prior booking. However, there is congestion at transshipment ports.

Local Rates (+)
Local Space (-)
Local capacity/Equipment (–)

Notes: Bookings must be made at least 4 weeks before

Middle East → Africa

One line Status Direct services are fully booked at premium prices, while transshipment providers are experiencing delays of up to 4–5 weeks. It is strongly advised to book in advance from all ports; 20-foot standard container and heavy cargo space are also restricted.

Local Rates The prices are increasing generally (+)
Local Space Critical and low in West Africa, particularly in East Africa (-)
Local capacity/Equipment Limited available (-)

Notes: Maersk Spot is reserved for two weeks in advance, and goods using “Shipping Guarantee” are given priority.

Middle East → China

One line Status In the fourth quarter of 2021, China’s October Golden Week, Christmas, and Chinese New Year will create substantial demand for container transportation. Costs have risen due to a shortage of equipment for items destined for Asia.

Local Rates The prices are increasing generally (++)
Local Space Tight Space (-)
Local capacity/Equipment available (-/=)

Notes: Book 3 weeks ahead

Middle East → Mediterranean MED

One line Status Rates are rising, space is scarce, and only premium-rate cargo is accepted.
Local Rates The prices are increasing generally (+)
Local Space Limited but at a premium (-)
Local capacity/Equipment available

Middle East → ISC (Indian Sub-Continent)

One line Status Occasional difficulties with shipping to India’s east coast due to congestion at the Colombo transshipment port
Local Rates The prices are increasing generally (+)
Local Space available (-/=)
Local capacity/Equipment available

Notes: Bookings must be made at least 2-3 weeks in advance to ensure availability.

Middle East → Far East Asia

One line Status Ships delayed in the Far East and some equipment limitations artificially restrict capacity.
Local Rates The prices are increasing generally (++)
Local Space Limited Space (-)
Local capacity/Equipment available (-/=)

Notes: Bookings must be made at least 2-3 weeks before

Inbound Ocean market update the United Arab Emirates

North America   

One line Status Because of port congestion, there are frequent void sailings and port omissions. For the next 3–4 weeks, there will be no space for export reservations; some carriers are halting operations to the Middle East in favor of Asia lanes. Capacity is diminishing month over month.

Local Rates rates are trending up month over month (+).
Local Space Very Critical (–)
Local capacity/Equipment Capacity is trending down MoM (-)

Notes: Book 4+ weeks out

AsiaPacific    

One line Status – Space in the Far East/Gulf is very limited, with more than 40% of sailings has been canceled in September. Space and equipment at Asia ports remain tight for October. Local Rates –  increase (++)   
Local Space – Super Critical (–)   
Local Capacity/Equipment – Under capacity (-)    
Notes-  Book a week before, Trucking shortage 

Latin America

One line Status Generally, space is accessible, capacity and spot rates are also steady month over month.

Local Rates Rate increases (+)
Local Space available (=)
Local capacity/Equipment (=)

Europe

One line Status Lack of dray capacity in the UK; equipment shortages originating in the Mediterranean. Space is readily accessible for what has traditionally been a backhaul service.

Local Rates Rates slightly increased (+)
Local Space Critical (-)
Local capacity/Equipment (-) Better in September 2021

AsiaPacific

One line Status- Space is limited, with many blank sailings; liners are unable to fill capacity gaps as assets are diverted to other channels. Operations in Myanmar continue to be sluggish. Limited service capacity and booking acceptance from carriers in Australia and New Zealand

Local Rates increase (+)
Local Space Limited (+)
Local capacity/Equipment (-/=)

Indian SubContinent (ISC)

One line Status Overall, the situation is steady, Space is easily accessible and Spot rates are rising month over month

Local Rates Rates increase (+)
Local Space available (+)
Local capacity/Equipment (=)

Air Cargo Updates to the United Arab Emirates October 2021

Air Freight Market Updates October 2021 for the United Arab Emirates

Air Freight Demand – Peak shipping season is approaching, and PMIs over 50 for major markets imply that volumes will be strong in the coming months. In the next months, the Covid issue may have an impact on demand in Canada and South East Asia. Asia-Pacific export freight traffic increased, but North American eCommerce remained strong. Overall, demand growth remained strong across all regions, with a +33 percent year-on-year increase on July 21. Furthermore, congested ocean ports continue to add to air traffic. Outbound flows from the Middle East have increased.

Carrier Capacity – A sharp rise in intra-American perishable trade as a result of the low 2020 baseline. Capacity, however, is still insufficient to meet present demand. In comparison to August 19, global capacity is still impacted and declining. The Delta variant is likely to have an impact on belly recovery in Canada, South East Asia, and Europe. A large influx of vaccinations has affected capacity expansion in North and Latin America.

Local rate -Rates to/from the Asia Pacific are anticipated to stay high due to continued restrictions. Airlines’ excess capacity is still accessible at a rate, and yields are being aggressively managed. The rate will stay high as we continue to see massive demand growth versus limited supply, and the forthcoming peak season will push demand even higher.

Capacity development by aircraft configuration January 2019 - June 2021
Global Freight Load Factor Development

North America and Latin America

When compared to pre-crisis levels, North American airlines flew 18.0 percent more CTKs in August. Manufacturing PMI indices show that production and new export orders in the United States are increasing rapidly. In the short run, this bodes well for the region’s freight demand projection. Among the region’s major global markets, the smaller North-Central America performed well, increasing by more than 39% compared to pre-pandemic August 2019. While Latin American airlines stood at the lowest of the CTK growth list for another month, with a 14.0% decline in international CTK compared to August 2019.

Europe

Far East Eastbound is still recovering, although it is almost back to full operational capacity. Prepare for probable consignee warehouse closures as Golden Week approaches. Through subsidiary hubs, EU airlines continue to provide compelling options into US hubs. This brings the interest rates back into balance. Rates have remained stable since there is enough capacity to meet demand. Because of the huge volume at ground handling ports, there were some bottlenecks for import and export cargo.

Asia

With the approaching public holiday in Mainland China, the market in North China remains brisk as shippers race to move goods. Prices for TPEB remain high, and capacity is restricted, but after the Golden Week, some supply is expected to return to the market, and rates may begin to decline. In Taiwan, USEC capacity is severely restricted, and many ORD flights are now canceled. Certain airlines are advertising their fast and priority services due to increasing market demand. The Vietnamese government is allowing certain businesses in Southern Vietnam to begin production, and demand is likely to increase.

The Middle East and Air Carriers ME

The reliance of Middle Eastern airlines on connecting foreign flights, along with a lack of major local markets, has delayed the region’s resurgence. Losses for Middle Eastern airlines are expected to be $6.8 billion in 2021 and $4.6 billion in 2022.

Recovery in International Travel will be uneven in 2022 Intra-Europe and Europe-Nth America Travel will outpace Asia

United Arab Emirates Freight Local Updates, October 2021

October 2021 Logistics News Updates

  • Hapag Llyod has revised its Local Costs / Service Fees and Detention & Demurrage Effective October 1, 2021, Hapag Llyod’s local charges from the UAE will rise. Read More Here  
  • Hapag Lloyd has a new fresh look and new feature in their Quick Quotes Tool, available for use at their website.   
  • FlyDubai Cargo has updated Routes and Capacity, effective from October 2021. For further detail Read More Here 
  • CMA CGM, with immediate effect sea priority Go (SPGO), will apply to all bookings made to West Africa and North Africa from UAE. There will be an increase in quantum effective immediately. To know more about the quantum reach out to us. Read More Here  
  • CMA CGM, with immediate effect sea priority Go (SPGO), will apply to all bookings made to East Africa from UAE. There will be an increase in quantum effective immediately. To know more about the quantum reach out to us. Read More Here 
  • Dp World and Ports, Customs and Free zone Corporation (PCFC) has issued the new safety requirements, Effective from October 1, 2021, for International Maritime Dangerous Goods(IMDG) Class5 cargo for the port Jebel Ali. Read More Here 
  • Maersk has updated APMM Global operations, Maersk vessel in real-time and gain access to AI-powered predictive analysis and estimated times of arrival (ETA) via their Hub. Read More Here  
  • Maersk has declared Customer Advisory Advance Cargo Information (ACI) from October 1, 2021, for the cargo arriving in Egypt, and it is becoming mandatory for all Egypt import shipments. Read More Here  
  • MSC, Mediterranean Shipping Company has reduced their transactions in cash/cheque effective from October 2, 2021. Read More Here  
  • ONE has implemented new surcharges effective from October 1, 2021, and also revised the Switch BL charges (SBL) for UAE. Read More Here  
  • Hapag Llyod has revised Regional Terminal Handling – Effective October 1, 2021, Hapag Llyod’s local terminal charges from the UAE will increase. Read More Here  
  • Hapag Llyod has declared Heavy Lift Charges (HLC) for all Middle East commercial routes effective October 1, 2021. Read More Here  
  • Hapag Llyod has notified an additional Marine Fuel Recovery (MFR) fee which is valid for both directions effective 1 October 2021 and which is presented as separate for your invoice and Bill of Lading. Read More Here  
  • On the ODEX platform, Hapag Llyod offered its option to pay and provide quick confirmation of payment following payment of Hapag Llyod invoices. Read More Here  
  • CMA CGM has agreed to halt all spot rate increases beginning September 9, 2021, and lasting until February 1, 2022. Read More Here

GRI (general rate increase) to/from the Middle East

New GRI from the Indian Subcontinent and the Middle East to the USA and Canada by Hapag Lloyd on Oct 1, 2021. Read More Here

Middle East PSS (Peak Season Surcharge)

Peak Season Surcharges (PSS) from Pakistan to ports in the Arabian Gulf will be implemented on October 1, 2021, by Hapag Lloyd. Read More Here

Tariff Rates by Hapag Llyod

Hapag Llyod announced Tariff Rates for all dry goods transported in 20′ and 40′ general purpose containers (including high cube containers) from Turkey to the Middle East and Indian Subcontinent starting October 1, 2021. Read More Here

October 2021 Factory Output News

Middle East   

Key findings output growth quickens as sales momentum remains strong

America

Durable goods shipments decreased 0.5 percent in August, owing mostly to a 2.7 percent reduction in motor vehicle and component shipments. Excluding transportation equipment, durable goods shipments increased 0.2 percent in August to a new all-time high of $182.6 billion. The change in the US economy from 2021 to 2022 is due to COVID-19 issues and supply restrictions. Because of more cautious consumer spending on services, fewer light vehicle assembly, and lower inventory investment, the estimate for real GDP growth in 2021 has been cut by 0.4 percentage points to 5.7 percent.

Europe  

The Eurozone’s real GDP rose by 2.2 percent quarter on quarter (9.2 percent annualized) in the second quarter and is expected to rise by a similar amount in the third quarter. Monetary policy will remain very accommodating for several years under the European Central Bank’s new policy framework. However, growth will decline as the stimulus from reopening fades and fiscal policies tighten considerably. Western Europe’s consumer-led growth is accelerating. Consumer expenditure is rebounding as a result of the easing of COVID-19 containment measures, strong job markets, and pandemic-era home savings.

Asia

Although the COVID-19 outbreaks are on a limited scale, the Chinese government’s zero-tolerance policy will result in poor economic development through the end of 2021. Mainland China’s economy has severely slowed. In August, industrial output growth slowed to 5.3 percent year on year (y/y), plagued by semiconductor shortages and production limitations imposed by the government to fulfill decarbonization objectives. Real GDP fell q/q in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam during the third quarter, according to IHS Markit analysts. Vaccination programs are ramping up, and new COVID-19 infections are down from recent highs.

This Month’s Eye-catching News

Delivery delays and shortages are fueling German inflation, It’s even dramatically cutting vehicle production. [Read More]

Shippers that have not been sufficiently prepared are now running out of time to execute some of the game-changing changes in peak season 2021. [Read More]

Amazon has grown to become one of the largest delivery companies in the United States, marking the company’s first attempt to become a stand-alone carrier in the mould of UPS and FedEx. [Read More]

Long Beach and Los Angeles ports in the United States have added night and weekend hours to alleviate congestion. [Read More]

UPS consumers demand local same-day delivery alternatives for all sorts of items, not traditional packages. [Read More]

Amazon Air has emphasized filling gaps in its US network, adding regular service to seven locations. [Read More]

American Eagle is able to reduce supply chain time by a week and a half, and Walmart has invested directly in shipping. [Read More]

Shipping bottlenecks at US ports are expected to last far into 2022. [Read More]

Global supply networks are beginning to sag as two years of stress on transportation employees takes its toll. [Read More]

HUUB is Maersk’s third acquisition of the year. The acquisition of HUUB improves Maersk’s technological capabilities by introducing the finest qualities of a contemporary entrepreneurial agile workplace. [Read More]

FedEx and UPS rate increases are driving up the cost of online shopping. [Read More]

Transportation costs are making their way across global supply chains, from Michelin tyres to Pampers diapers. [Read More]

Maersk sells reefer business to CIMC for $1bn [Read More]

Coca-Cola Switches to Bulk Freight Due to Container Crisis [Read More]

A Walmart-Home Depot Merger Makes Shiploads of Sense – Bloomberg [Read More]

During the first half of 2021, Dubai’s foreign trade increased by 31%, reaching AED722 billion. [Read More]

Thailand to Start Shipping Line to Boost Status as Logistics Hub [Read More]

Allcargo Logistics Ltd. of India is considering selling a share in its container transport company, ECU Worldwide. [Read More]

CMA CGM SA expects to receive two Boeing Co. 777 freighters for its embryonic air-cargo operation early next year, indicating the French maritime giant’s rapid expansion into logistics. [Read More]

The United States’ trade deficit has reached an all-time high, putting a strain on consumers. [Read More]

Cotton Prices Surge to Highest Level in a Decade [Read More]

Why It’s Easier to Find Expensive Appliances Than Cheaper Ones – [Read More]

What if Inflation Is Here to Stay? [Read More]

Freight surcharges will remain even after rates ease :: Lloyd’s List [Read More]