February 2022 Ocean and Air Market Updates      

Monthly Ocean and Air Freight Market Updates        

Trending Topic February 2022 

In 2022, Container Transport Profitability Is Predicted To Reach New Stratospheric Peaks. 

According to Drewry’s most recent Container Forecaster research, the sector’s EBIT in Q3 2021 was $70.9 billion, representing a “staggering nine-fold increase” over the previous year. Drewry has boosted its forecast for the year to $190 billion from $150 billion previously, and ocean carriers will have their third year of 15% or greater annual revenue growth in 2022. 

In 2022, Container Transport Profitability Is Predicted To Reach New Stratospheric Peaks.

Carriers have yet to report full-year financial results for 2021, but congested supply chains and exceptionally high rate levels will keep the profit faucet running until 2022. Drewry projects $200 billion in EBIT for container shipping in 2022, $10 billion more than in 2021, with a margin of 37%. 

According to Drewry analysts, the third quarter will very surely be the highest profit period for carriers in the current cycle, while the full year 2022 will almost certainly outperform 2021. 

Market Trend February 2022 

According to global Purchasing Manager’s Index (PMI) numbers issued in January, manufacturing morale remained buoyant in the fourth quarter despite a slew of obstacles like supply delays and the ongoing threat from COVID-19. 

China’s manufacturing PMI increased for the second consecutive month in December to 50.3, indicating that the economy was in expansion mode ahead of the Chinese New Year holiday in February, a GDP increase for China during the fourth quarter of 2021, up 4 percent from the previous year, while manufacturing in China also increased in tandem, up 4.3 percent from the previous year. 

Omicron Drives Rail Volume Decline Supply Chain, According to Dive, the spike in Omicron cases has resulted in staffing issues within the rail service. In addition to interrupted service, cumulative volume across railways fell by around 4.5 percent in the first three weeks of 2022 compared to the same period in 2021. Nonetheless, rail demand is projected to continue robust as shippers seek to avoid expensive driving costs. 

February 2022 United Arab Emirates Sea Freight Market Updates 

TradeLane The Ocean Outbound Updates  
Middle East → AMNO Space on the West Coast, in Houston, and Savannah is restricted to entirely unavailable, and there is an equipment deficit out of Turkey. Tight space, capacity, and spot rates are all flat mom. 
Local Rates: PSS/GRI are applied by all carriers (++) 
Local Space: Extremely Critical (–)  
Local capacity/Equipment:  Limited / Undercapacity (-)  
Notes: Bookings need to be placed a month ago in advance 
Middle East → AMLA  Congestion at transshipment ports, limited carrier possibilities to South America’s east and west coasts. 
Local Rates:  Prices are on a general increase (++) 
Local Space: Very tight (–) 
Local capacity/Equipment: Available (-/=)  
Notes: Reservations must be made at least 4 weeks ahead to secure 
Middle East → Europe Equipment shortages in Turkey, Space in Northern Europe, and the West Mediterranean are manageable. 
Local Rates: Rates continue to be at an all-time high. They have, however, remained consistent since January 20, 2022. In the run-up to the Chinese New Year season and owing to blank sailing schedules, some modest increases are likely in February. (+) 
Local Space:  Critical (-) 
Local capacity/Equipment: Available (-/=)  
Notes: Take planning for a month   
Middle East → Oceania Space is gradually improving, but not meeting demand, thus rates remain high. Congestion at South East Asian transshipment ports is generating several weeks of transit delays. 
Local Rates:  (+)   
Local Space: (-/=)  
Local capacity/Equipment: (-/=)  
Notes: Reservations must be made at least 4 weeks ahead to secure  
Middle East → Africa East Africa’s space is opening up, but scheduling delays prevent weekly sailings, while South Africa’s capacity is still constrained. West Africa’s space is quite open, although there is a lack of equipment coming out of Turkey. 
Local Rates: Prices are on a general higher (+) 
Local Space:  Critical and low for East Africa, while relevantly at ease for South and West Africa (-)       
Local capacity/Equipment: available (+)  
Notes:  Only bookings made at least 2-3 weeks in advance  
Middle East → China Market conditions are projected to last at least through Q1 – with substantial demand during the Chinese New Year and the Olympic Games in February. However, the largest public holiday in APAC is on February 1st, 2022. The arrival of Covid-19(Omicron) has resulted in a port personnel shortage, which will have repercussions for the forthcoming holiday season. 
Local Rates: Price is on a general increase (++) 
Local Space: Extremely Critical (–) 
Local capacity/Equipment:  Limited (-) 
Notes: Reservations must be made 3-4 weeks ahead to secure  
Middle East → MED West Mediterranean space is stable, while the Eastern Mediterranean space is recovering. Out of Turkey, there is a shortage of equipment, and capacity and spot rates remain flat. 
Local Rates: Prices are on a general increase (+) 
Local Space: Limited  (-/=) 
Local capacity/Equipment:  Available
Middle East → ISC Carriers focus on transporting equipment back to Asia for local exports since space is generally available. Turkey has an equipment deficit. 
Local Rates: Price is on a general increase (+) 
Local Space: Available at premium level (-/=) 
Local capacity/Equipment:  Limited (-)  
Notes: Reservations must be made 2-3 weeks ahead to secure 
Middle East → Far East Asia Except for North India, which has some equipment supply difficulties, space is mostly available. There is some fluctuation in the rates provided throughout the market. 
Local Rates: Price is on a general increase (+) 
Local Space: Available (=) 
Local capacity/Equipment: available (=) 
Notes: Reservations must be made 2-3 weeks ahead to secure 

United Arab Emirates Inbound Ocean Market Updates  

February 2022 

TradeLane The Ocean Inbound Updates  
North America (AMNO) Port congestion, frequent void sailings and port omissions, limited overall space, and more accessible options from the East Coast. Due to high congestion at transshipment hubs, certain carriers are canceling service to the Middle East from the United States’ West Coast. Capacity is reducing while rates are increasing. 
Local Rates: Rates have been increased in January 2022. (=/+) 
Local Space: Critical (-) 
Local capacity/Equipment: Availability for standard equipment at ports has not been an issue, but any special equipment is hard to come by. (-/=) 
Notes: Place bookings 2-3 weeks in advance to secure your equipment, trucking, and vessel space.     
Latin America (AMLA) Transshipment delays and a lack of equipment. Capacity is reducing while rates are increasing 
Local Rates: Rate increase (+)  
Local Space:  Critical (-) 
Local capacity/Equipment:  (-/=)  
Notes: Book 2-3 weeks before 
Europe Space is pretty open, however, there are significant equipment shortages and delays in South East Asian transshipment ports. In Italy and the United Kingdom, there is a shortage of equipment and dray power. Capacity and spot rates are both fixed. 
Local Rates: Rate slight increase (+/=) 
Local Space: Critical  (-/=) 
Local capacity/Equipment: (=) 
Notes: Book 2-3 weeks before. Shortage of 20’ft containers  
AsiaPacific Continued low service capacity and carrier booking acceptance; heavy freight backlogs that could not be shipped before the holidays. Carriers in Asia are slightly lowering prices to gather rollover cargo and fill vessels over the Lunar New Year period. 
Local Rates: increased (+)   
Local Space:  Available (-/=) 
Local capacity/Equipment: Under capacity (-)  
Notes:  Book 3-4 weeks before 
Indian SubContinent (ISC) Continuous Ocean Alliance blank sailings, spot rates are declining, and capacity is stable. 
Local Rates: Rate increase (+) 
Local Space: Critical (-/=) 
Local capacity/Equipment: Limited (-) 
Notes:  Book 2 weeks ago, Shortage of 20’ft containers  
North Africa Vessels have the capacity, and carriers are ready to receive extra cargo. There is a major shortage of 20′ containers from North Africa. Shipment delays persist. 
Local Rates: Rate increase (+) 
Local Space: Critical (-) 
Local capacity/Equipment: Limited (-) 
Notes: Book 2 weeks ago, Severe Shortage of 20’ft containers 

Air Cargo Updates to the United Arab Emirates January 2022  

Air Freight Demand- The impact of eCommerce on demand remained significant; AMNO import volumes were primarily influenced by movements in the auto, tech, fashion, and eCommerce sectors. Outbound demand from the EU has been stable. PMIs above 50 for key markets suggest that volumes will be high in the next months. 

Carrier Capacity- Belly capacity improved marginally in response to higher vaccinations, although it is still -28 percent lower than pre-COVID values. The emergence of the Omicron variety resulted in flight cancellations; belly recovery was hampered. ASPA capacity is projected to be limited until the end of the 2022 Beijing Winter Olympics and the Chinese Spring Festival; rigorous quarantine precautions have resulted in flight cancellations. 

Local Rates Rates have remained high as demand has outstripped capacity; ocean congestion and flight disruptions have contributed to the woes. Rates will remain high as capacity remains constrained. 

carrier rates
capacity development by aircraft configuration January 2019 to December 2021.
Global Cargo Load Factor Development.

North America & Latin America    

US export demand progressively grew in the second part of January. Capacity may be controlled. Rates to Latin America, Europe, and Asia have climbed somewhat since the first two weeks of January. Most terminals have restricted free time for storage and early close-outs for exports to meet throughput timings and screening requirements. 

In the United States, Omicron has caused several local and international flight cancellations and/or delays. Larger shipments from large outbound gateways may take 2 to 3 days to be picked up from the moment they are scheduled. The terminals at LAX/ORD/JFK have reduced the inbound backlog cargo little, which benefits the export side. 

Recovery in international travel will be uneven in 2022 intra-Europe and Europe-nth America travel will outpace Asia.

Europe 

Congestion at European hubs is improving, resulting in a slight reduction in average dwell up time at destination. As we near the end of January, demand remains consistent. Rates on the West Coast of the United States have increased somewhat, but overall rates have remained stable. Congestion in important EU export hubs is manageable. Due to severe snowfall, the Istanbul airport was briefly closed. Expectations should be managed if transferring merchandise from this area; nonetheless, there has been little influence on freight movement thus far. 

For the time being, capacity is stable, with airlines using intra-Europe itineraries to supplement Transatlantic flights. If the lead time allows, a delayed option with rates lower than the average market level may be well suited. 

Asia    

Taiwan’s market remains stable, with no significant changes in rates or capacity before Lunar New Yeak r (LNY). The most severe capacity constraints are at SFO and ORD, although other destinations are still viable. Many passenger flights in Hong Kong have been cancelled, while Cathay Pacific’s air freight flight schedule has been reduced to around 20% of its typical levels in Q1. 

China: Difficulty COVID-19 restrictions, as well as preparations for the Beijing Winter Olympics, are complicating airfreight shipments just as shippers start the pre-Chinese New Year busy time. 

Trans-Pacific East Bound (TPEB) flights are still being postponed due to positive Covid instances, but demand is progressively growing before the Lunar New Year (LNY), leading rates to soar. Rates for Far East Westbound (FEWB) flights continue to decline as demand in South China remains low. Demand is growing in the run-up to LNY. Capacity is virtually filled, and TPEB rates have increased. This trend is expected to continue through the LNY holiday in North China, based on the current market supply. 

The Middle East and Air Carriers ME 

Middle Eastern carriers’ international cargo volumes grew by 5.7 percent in December 2021 compared to December 2019. Growth slowed at the end of the year, in particular, due to a drop in volumes on the crucial Middle East-Asia route. Foreign CTKs were 10.6 percent greater in 2021 than in 2019, giving the region a marginal increase in market share. 

Qatar Airways Cargo will start insourcing its operations in Spain, which were previously managed by ATC Aviation Services, later this month. The airline claims it would keep all current regular flights while introducing some new routes, with online booking available through WebCargo by Freightos. 

Local News updates the United Arab Emirates February 2022 

  • ESL has implemented an Environmental Fuel Surcharge (EFS), Effective from January 2022,  as per below will be imposed based on a Low Sulphur fuel price of between US$600 to US$650 per ton and will remain the same in February 2022. Read More Here  
  • MSC will be implemented late D/O collection fee, Effective from 1st February 2022. Read More Here  
  • Maersk offers the broadest coverage and competitive transit times at unmatched reliability, effective February 1st, 2022, that will proceed and cancel any booking booked through SSIB aging 15 days and above with no container(s) linked to it to free up space allowing the opportunity to more customers to book, materialize and load their shipments with them. Read More Here  
  • CMA CGA has implemented Peak Season Surcharges (PSS03), Effective from February 15th, 2022, for cargo from Middle East Gulf, Red Sea to USEC + USGC + Canada East Coast. Read More Here  
  • CMA CGA has advised that Any new booking under Carrier Haulage to or from Mali are suspended until further notice, Due to restrictions imposed by the ECOWAS (Economic Community of West African States) against Mali. Read More Here 
  • ESL has updated custom advisory for East Africa ports, find the latest port and service update Read more here 
  • Hamburg Sud has implemented Demurrage and Detention Rates (DND) to the United Arab Emir, Effective from March 1st, 2022 those demurrage & detention rates will be applicable for imports to UAE Expiry. Read More Here  
  • CGA CGM Has implemented Overweight Surcharge (OWS), Effective from February 15th, 2022, on dry cargo from West Med, Black Sea, Adriatic & East Med to northwest India & Pakistan. Read More Here  
  • ESL has implemented General Rate Increase (GRI), effective from February 16th, 2022, In order to continue providing high-quality service from the Middle East to Mombasa, Kenya, and Dar Es Salaam, Tanzania. Read More Here  

Factory Output News February 2022    

Financials overtook Healthcare to earn the top spot in the global sector output ranking in December. Despite a global increase in COVID-19 instances, consumer services was the worst-performing industry. 

According to the IHS Markit Flash U.S. Manufacturing PMI, manufacturing growth in the United States fell for the sixth month in a row in January. New order growth has slowed to its lowest level since July 2020, with manufacturers indicating that clients have reduced spending owing to cost increases. 

North America, the Middle East, and Africa saw double-digit growth in 2019, while Europe experienced more modest growth and Asia Pacific remained largely stable. 

Latin America’s volume remained lower than in 2019. Total market capacity was down 10.9 percent from the previous year. 

Soybean imports into China began to recover from African Swine Fever (ASF) in 2019, and soybean imports are predicted to be 10% higher in 2021/22 than in 2017/18. With fewer US grain and soybean imports in the fourth quarter of 2021, a stronger Brazilian grain season is expected in early 2022. 

Cambodia A bilateral free trade agreement (FTA) between Cambodia and Korea is expected to enter into force early this year, opening up new markets for Cambodian goods and encouraging more export investment. 

Singapore’s non-oil exports climbed by 18.4 percent in December, making 2021 the best year since 2010. Electronics and medications demand supported shipping expansion. Exports to China are projected to end due to the increase in Omicron cases and China’s zero covid policy. 

Experts have cautioned that increased tensions between Russia and Ukraine may raise marine bunker fuel prices, putting an additional strain on carriers. 

Vietnam BW Industrial is growing and enhancing its capability to assist export companies in the Bac Tien Phong Industrial Zone in response to rising demand. 

Malaysia AirAsia has entered into a collaboration deal with the French logistics business Geodis to deliver dedicated scheduled cargo flights on a regular basis. 

Interesting News This Month 

  • Intra-Asia and Africa trades lose out in today’s record-breaking box shipping era Read More Here 
  • The Global Rail Freight Market is expected to grow by $ 29.29 bn during 2022-2026. Read More Here 
  • Ningbo Containerized Freight Index remains stable in January 2022. Read More Here 
  • Global freight rates move up on container shortage, traffic congestion at major ports. Read More here 
  • Elevated freight rates are likely to remain through much of this year because of market turmoil, according to experts. Read More Here 
  • Businesses may want to sign 2- or 3-year contracts to hedge against future price increases says the head of DHL’s freight business. Read More Here 
  • Airfreight rates out of China to the US and Europe have plummeted after December’s record holiday season. Read More Here 
  • Lufthansa Cargo is the latest carrier to suffer operationally from an outbreak of Covid and has been forced to cancel all transit traffic through Frankfurt. Read More Here 
  • The container shipping sector looks set to continue its extraordinary profitability cycle in 2022. Read More Here 
  • Soaring inflation, tightening cargo capacity, and a shrinking labor market only add up to one thing for today’s global logistics managers: the triple whammy. Read More Here 
  • Shipping line profits at full steam as trade chaos shows little sign of abating. Read More Here 
  • Disruptions in China can lead to ‘ripple effects’ across the global supply chain, says HSBC. Read More Here