Ocean carriers are shifting tonnage to the more robust Far East-Persian Gulf and Far East-India routes, where rates are steadier. More than 565,000 TEU of capacity was removed from the Asia-North America and Asia-Europe trades in 2022, according to Alphaliner’s data.
Meanwhile, the active container fleet on the Trans-Atlantic trade grew 16.2% in 2022, the equivalent of 162,300 additional TEU slots.
The most significant tonnage shift has been on routes to the Middle East and India which grew by 11%, the equivalent of 320,600 TEU of fleet capacity. “Indian ports are now handling an increasing number of 13,000 - 15,000 TEU ships which have been replaced by megamax vessels on the East-West trades,” said Alphaliner.
The capacity shift seen in 2021 to the Asia-North America and Asia-Europe trades was from reducing the intra-Asia fleet by -11% and Africa-related services by -6%. Capacity is still yet to be fully restored on either of the two tradelanes, noted Alphaliner.
Source: Alphaliner
Global air cargo demand fell -8% year-on-year (y/y) in January 2023 and -10% when compared to pre-COVID 2019. Global air cargo capacity has improved 11% y/y, yet available capacity remains -2% below 2019 levels.
Dynamic load factors, which measure how full planes are using both weight and volumes, reached 54% in January. Excess supply paired with weak volumes has resulted in load factors falling -7% y/y and -5% compared to 2019.
Industry analyst CLIVE Data Services said the decline was partially because of an earlier-than-normal Chinese New Year, bringing about factory closures ahead of the holiday. CLIVE said this also contributed to a weak global market, resulting in load factors at a level not seen in a while.
Global air spot rates have fallen -37% but remain 55% above pre-pandemic levels. “So, there is still a high level of uncertainty but, if rates haven’t yet reached the 2019 level in value in the current climate, and with an expectation that inventory levels will need restocking at the end of Q2 and Q3, then it’s unlikely we will see spot rates return to the pre-pandemic level unless this happens soon,” commented Niall van de Wouw, chief airfreight officer at Xeneta. “But this, of course, partly depends on consumers spending in a similar fashion as we have seen recently,” he added.
Source: Air Cargo News
Unstable demand trends in recent years have made it difficult to predict ocean freight cargo volumes, according to the head of the Port Authority of New York and New Jersey. “There is no longer any seasonality or predictability to the cargo peaks and valleys that our industry had become accustomed to,” port director Beth Rooney said in a State of the Port briefing.
Cargo volumes have surged at many ports over the past few years but are now facing declining demand. Retailers are pulling back orders to clear inventories and the warehouse market is showing signs of cooling due to a slowdown in demand.
The Port of New York and New Jersey achieved record volumes in 2022, holding a four-month streak as the nation’s busiest container port, President of Global Container Terminals John Atkins said. The streak was broken in December, though, as cargo volumes fell nearly -21% year-over-year.
Rooney said the port had noticed a “rather sharp decline in volume and a softening of the market” since October. She added that the slowdown was due to the extended lunar new year shutdowns, rising COVID-19 cases in China, rising costs, lower consumer spending and high inventory in warehouse and distribution centers. “We expect that market to remain soft but at more normalized levels through the first half of the year,” she said.
Source: Supply Chain Dive
Schedule reliability improved slightly by 0.1% to reach 56.5% month-over-month (m/m) in December. On a year-over-year (y/y) level however, schedule reliability outperformed by 24.8%.
The average delay for late vessel arrivals increased slightly by 0.34 days m/m to 5.43 days in December. “Despite the increase, the December 2020 figure is still below the 2020 level, and a massive -2.31 days below the 2021,” noted Sea-Intelligence in its monthly report.
Of the top 14 carriers, MSC and Maersk were the most reliable at 63.3% and 60.1%, respectively. The following ten carriers recorded reliability between 50%-60%. Yang Ming and ZIM recorded schedule reliability at 47.7% and 47.2%, respectively. ZIM recorded the largest m/m decline of 6.1%.
Source: Sea-Intelligence
Global air cargo demand fell -8% year-on-year (y/y) in January 2023 and -10% when compared to pre-COVID 2019. Global air cargo capacity has improved 11% y/y, yet available capacity remains -2% below 2019 levels.
Dynamic load factors, which measure how full plans are using both weight and volumes, reached 54% in January. Excess supply paired with weak volumes has resulted in load factors falling -7% y/y and -5% compared to 2019.
North American international container loadings fell -6% in 2022 after a 5% increase in 2021. Full-year shipments of domestic containers were up 1.6% year-over-year, with seven positive months after expanding 2.3% in 2021. North American trailer loadings, which account for just 5.2% of total intermodal volume, fell -23.8% in 2022, after rising 2.2% in 2021.
Intermodal network fluidity improved throughout the year, although challenges arose including terminal congestion, chassis shortages, the threat of a U.S. rail strike, unresolved West Coast labor contract negotiations, and warehouses which are still overfilled.
Expectations in 2023 are for the shift of import arrivals from the West Coast to the East Coast and Gulf locations to continue. Total intermodal volumes are projected to be flat in 2023 based on aggressive marketing from OTR truckers and retailers continuing to reduce bloated inventories.
“The past year presented challenges for intermodal. All four quarters posted negative output,” said Joni Casey, president and CEO of IANA. “The industry continues to address equipment availability, facility capacity and service with the goal of turning things around in 2023.”
Source: American Journal of Transportation
