Global Aperture After three years of supply chain disruptions from the global pandemic, the Federal…
Aperture & Focus: July 21 2022
Sea freight congestion gets stubborn as ongoing labor action at major trade hubs adds to the already-significant bottlenecks, but shipper demand is also plummeting, according to global trade analysts. New marine cargo studies find the glut of container orders in 2021 combined with the current deficit in demand has produced an equipment surplus. Although pre-owned containers have significantly decreased in resale value, many carriers continue to place new orders as poor drayage reliability to and from key ports undermines empty container returns.
The National Association of Manufacturers (NAM) released a statement on July 19 advocating the Creating Helpful Incentives to Produce Semiconductors for America (CHIPS) Act, which would heavily subsidize chip manufacturing in the US and reduce reliance on foreign-made semiconductors. But if demand for laptops, smartphones, and other consumer electronics continues to wane, fabricator inventories may top off by the end of third quarter and further alter seasonal performance trends in the cargo industry.
Airports around the world tally higher on flight delays and cancelations: Toronto, Frankfurt, Paris (CDG), Amsterdam-Schiphol, London-Gatwick, Shenzhen-Bao’an, Toronto, and Soekarno-Hatta were recently listed among the top airports for reductions on scheduled services. With staffing shortages reported throughout the airline industry, dedicated cargo services take a backseat to air travel this summer. But new draft legislation in the EU may slowly replace jet fossil fuels with sustainable aviation fuels (SAF) —and a corresponding fuel tax may be passed through to passenger tickets if the legislation is approved next quarter. Transport and travel industries of South America and the Caribbeans are next up for a major refueling: global trackers observed 42 oil tankers en route to Brazil on July 19, well above the average oil import levels.
Following last month’s ratification of the Ocean Shipping Reform Act of 2022, The Federal Maritime Commission (FMC) publishes a new advisory for shipper dispute resolution and agency oversight. On July 18, some 400 truckers impeded traffic to Port of Oakland, leading marine terminals to suspend truck gate and some waterside operations. The protest, expected to last through the week, is supported by unionized longshoremen who also refused work at Oakland terminals.
After new Covid-19 BA.5 outbreaks were recently reported in several cities including Gansu, Shanghai, Guangdong, Guangxi, and Henan, Chinese officials now require truckers to obtain a travel passport and a negative 48-hour Covid-19 test to drive beyond city borders. Facing potential delays of up to one week, some shippers may find reprieve in the Hubei province, where the new Ezhou Huahu Airport (EHU) officially began operations on July 17, connecting central China to 50 domestic and international cargo hubs.
Europe, Middle East & Africa
Extreme heatwaves in Western Europe have culminated into wildfires, extensive drought, and transport infrastructure degradation: high temperatures in the UK forced rail network closures across London, York, and Leeds, while super-heated tarmacs halted arrivals and departures at several airports on July 18. In Europe’s Schengen Region, the 800-mile Rhine river was recorded at its lowest water level in 15 years, inhibiting barges from inland waterway transport.