Freight and Logistics News and Market Update - Week of 8 December 2022

• Air cargo rates out of North America showed a decline in November. However, the pace of decline is slower than in other regions.
• Possible strikes and labor disruption updates:

  – Europe: London's Heathrow Airport baggage handlers voted for a 72-hour strike on 16 December.

  – TAP Air Portugal canceled 360 flights due to a two-day strike on 8 - 9 December.

  – Ryanair crew members in Spain continue partial strike on Fridays, Saturdays, and Sundays until January 2023.

  – Spanish airline Vueling also started a partial strike over low wages on Fridays, Sundays, and Mondays until January 2023.

  – Rail workers at the RMT, UK's largest rail union, will strike on 13 December, 14, 16 and 17 over a pay dispute with Network rail.

  – In France, train conductors and ticket collectors will strike from 23 - 26 December and from 30 December - 2 January due to a pay dispute.

  – Asia-Pacific: South Korea's government ordered some of the striking truckers back to work.

• Air travel activity in China dropped further in November due to the rise in Covid-19 cases and the nation's ‘Zero-Covid’ policy. Air cargo rates out of Asia Pacific trend downwards, and airlines registered losses in revenues as air cargo demand has been down and global demand is shrinking.

Air

• Air cargo rates out of North America showed a decline in November. However, the pace of decline is slower than in other regions.

Ocean

• The Port of Savannah is handling more containers than ever before, so the Georgia Ports Authority (GPA) is planning to build new container berths in the port. Construction will begin in early 2023 and will allow The Port of Savannah to handle larger ships.

Air

• Avianca is launching seven new passenger routes through Latin America and reactivating fifteen more between Latin America and North America increasing cargo capacity between the two regions.
• Latam Airlines announced it will offer additional flights between Brazil, Peru, Chile, and South Africa. The route launch dates vary between March and August 2023, but capacity is expected to increase.

Air

• Air travel activity in China dropped further in November due to the rise in Covid-19 cases and the nation's ‘Zero-Covid’ policy. Air cargo rates out of Asia Pacific trend downwards, and airlines registered losses in revenue as air cargo demand has been down and global demand is shrinking.

Ocean

• South Korea's government ordered some of the striking truckers back to work. According to MILOT (The Ministry of Land, Infrastructure, and Transport), container transport at twelve ports across the country has since recovered to 82% of the average operating level and the Busan Port is operating at 97%.
• Carriers have announced 59 blanks sailings for the Transpacific Eastbound trade lane for the month of December, reducing 29.1% from normal capacity.

Air

• The Dutch government's proposal of limiting aircraft movements in Netherland's Schiphol Airport is set to begin next year and will have a 440,000-flight cap. IATA calls for the decision to be reversed as it could affect cargo capacity.
• The following are strike updates through the EU:
  • London's Heathrow Airport baggage handlers voted for a 72-hour strike on 16 December over a pay dispute. The possible strike is expected to affect ten significant airline flights, including Lufthansa, Swiss Air, Egypt Air, Aer Lingus, and Finnair.
  • TAP Air Portugal canceled 360 flights due to a two-day strike by the cabin crew on 8 December and 9 over a dispute regarding low wages. Delays and disruptions are to be expected.
  • Ryanair crew members in Spain continue partial strike on Fridays, Saturdays, and Sundays over a pay dispute which started months ago and is scheduled to end in January 2023. This affects most of the country's airports, due to the large number of Ryanair flights operated in Spain.
  • Spanish airline Vueling also started a partial strike over low wages on Fridays, Sundays, and Mondays until January 2023. Service capacity is currently around 57-80% with the decree of the Spanish government.

Ocean

• Starting in 2023, Swissterminal will expand its network with direct services from Switzerland to Antwerp, Belgium, and Rotterdam, Netherlands.
• Port of Valencia has approved a new sustainable container terminal with a 5 million container handling capacity in a surface area of about 1,370,000 square meters and will operate using 100% renewable energy.

Ground

• Rail workers at the RMT, UK's largest rail union, will strike on 13 December, 14, 16 and 17 over a pay dispute with Network rail. According to Network Rail, half of the railways will stop working on the days of the walkouts, and just 20% of services will operate. Significant disruptions are expected in train schedules.
• In France, train conductors and ticket collectors will strike from 23 - 26 December and from 30 December - 2 January due to a pay dispute. Significant disruptions are expected in train schedules.

Air

• Starting on 8 December, Etihad Cargo will launch two weekly flights between Chennai, India, and Shanghai, China providing long-haul cargo capacity to all top three Chinese gateways, including Beijing and Guangzhou.
• Emirates has expanded its UK passenger operations with an additional third daily A380 flight from London Gatwick Airport to Dubai, until 3 August 2023. The additional flights may enable additional cargo flow and belly capacity.

Ocean

• Africa's port of Abidjan has launched a new container terminal, increasing container handling capacity from 1 million TEUs to 2.5 million TEUs annually. The port will also be able to receive vessels with 16 meters of draft which could carry up to 14,000 TEUs.

• According to the Sheffield Hallam University's Helena Kennedy Centre for International Justice report, a new focus on forced labor enforcement around Chinese automobile products and parts may be imminent. The report identifies 96 companies relevant to the automotive industry operating in the XUAR and more than 40 auto sector manufacturers in China that have accepted forced labor transfers of Uyghur workers throughout China. It also identifies more than 50 international auto parts or automobile manufacturers sourcing directly from these companies or from businesses that have done so.
• US Customs and Border Protection (CBP) is imposing immediate import restrictions on fish and fish products from the New Zealand inshore. This new import prohibition protects a nearly extinct dolphin species native to the west coast of New Zealand's North Island.
• Customs and Border Protection (CBP) is planning to begin its Global Business Evaluation Proof of Concept pilot on 19 December. CPB is seeking licensed customs brokers and importers that file their own import entries, and CBP will accept requests to participate starting 2 December and throughout the duration of the test.

Logistics Market News:

• According to Ti's 2023 projections, the contract logistics market is predicted to grow slower than it did in 2022. Projections indicate a 3.1% growth year-over-year, however, slowdowns are expected in Europe and North America. Europe's growth was 2.2% in 2022 and it is predicted to grow by only 0.6% in 2023.

EU Energy News:

• EU countries will consider a gas price cap slightly lower than the prior proposal of €275 MWh/year starting 1 January 2023.
• New proposal: limitation of €264 MWh/year and requirement that prices stabilize above the given level for five trading days, instead of two weeks.
• 5 EU countries proposed two options: a fixed price cap of €160 MWh or a "dynamic price cap" (fluctuating according to existing LNG gas price benchmarks).
• Disagreements remain; proposals to be discussed with hopes for consensus before 13 December, when national energy ministers are set to discuss and aim to approve the final decision.
• $60 per barrel price cap for Russian oil, agreed upon by the EU, the G7 and Australia, has officially come into force – it will be reviewed by the EU and G7 every two months. Countries which do not adapt will purchase Russian oil above the given price cap and will not utilize Western services to obtain, insure and transport it.