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Aperture and Focus- Sept 2

Aperture and Focus -September 2, 2022

Global Aperture

With the world’s grain supply still mired in uncertainty due to the ongoing Russia-Ukraine conflict, demand for Canadian grain is “skyrocketing”, and producers are on track to harvest their third largest crop on record. However, experts are concerned that seasonal wildfire risk may continue through September and repeat British Columbia’s 2021 cargo disruptions, with cascading effects to global supply chains.

New published data from the Purchasing Managers Index (PMI) also indicated manufacturing slowdowns in East Asia and risk of recession in Europe. Now, some airline executives forecast that the stacked exigent circumstances of lockdown, extreme seasonal weather, staffing shortages, and economic inflation will contribute to weaker demand compared to previous fall peak seasons, particularly in Asia-Pacific outbound lanes.

Consistent with previous years, ocean carriers announce blank sailings in the coming weeks, but some analysts believe this is attributed to kneejerk order cancellations and an unusual shift in consumer spending rather than the upcoming Golden Week holidays.

Regional Focus


The ports of Los Angeles and Long Beach—once hot spots for cargo congestion—have all but cleared their early-spring backlogs with only eight ships waiting to berth on August 30. Hours north, the Port of Oakland continues whittling away its cargo backlog as agricultural exporters to explore alternative routes with rail and steamship lines.

While California waits on inland rail congestion and unresolved labor negotiations to cool down, shifting cargo traffic continues to seep into East and Gulf Coast ports, where a delayed Atlantic hurricane season poses high risk of upheaving port operations. Surprisingly, the Port Authorities of New York and New Jersey will not implement a container surcharge in the coming month, citing progress in resolving port congestion despite their own empty container buildups.

Railroad operators reached a tentative labor agreement on August 29; three of 12 worker unions have agreed to new contract provisions. However, a strike may be staged as soon as September 16 if the remaining nine unions reject the offer. Further south, Mexico’s Secretariat of Infrastructure, Communications and Transport (SICT) will continue implementing a 6-month emergency cap on intermodal freight rates.


Chinese officials have raised Covid-19 restrictions throughout Shenzhen to at least September 1; mass-testing is being conducted in the Port of Tianjin, and lockdowns have been enforced in Beijing ahead of the country’s party congress, a political summit that takes place once every five years. Chinese airlines also expand intercontinental cargo services following tit-for-tat flight suspensions between China and the US.

Devastating monsoons in Pakistan are heading to the country’s southern region via the Indus river, potentially cutting waterway access and sending refugees to port cities like Karachi. A four-month import ban that included automobiles and mobile phones was partially eased on September 2, but now port authorities in Karachi are mulling over the creation of a regulatory body to valuate detention and demurrage charges for the current cargo buildup.

Europe, Middle East & Africa

Rhine River’s Kaub waypoint will drop again to critical levels—as low as 71 centimeters (28 inches) early Monday, according to German government data. Inland waterway transport remains largely at the mercy of nature’s caprice, but port operators and dockworker unions have settled on contract terms following a three-month labor dispute affecting North Sea cargo operations. In conjunction with slowed imports from Asia and recovering workforce numbers, handling performance at the ports of Antwerp, Rotterdam, Hamburg, and Bremerhaven have made significant improvements in recent weeks.

In contrast, German airline Lufthansa was forced to cancel approximately 800 cargo and passenger flights at its Munich and Frankfurt hubs on September 1 after unionized pilots staged a walkout. Pilots of the carrier’s subsidiary Eurowings also voted in favor of strike action for an undetermined date, further marring air market outlook.

Following the September 1 end of an eight-day strike at UK’s Felixstowe Port, trade analysts and shippers across Asia-Pacific have also observed origin-side deficits in performance. Port operations have resumed per usual, but additional labor action may take place on September 19 should contract negotiations stall, and this time Liverpool may also join in.

Of interesting note: as a consequence of the Russia-Ukraine conflict, a foreign exchange crisis in Egypt has emerged in the past six months and compromised bank and importer credit. Cargo containers have been held at port customs authorities, creating a backlog of raw material inputs, components, and finished goods. On August 30, Egypt’s finance ministry announced the implementation of measures to reduce financial burden on importers and clear cargo congestion.

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