Global Aperture After three years of supply chain disruptions from the global pandemic, the Federal…
Aperture & Focus: September 29, 2022
The US Federal Reserve announced a 0.75% key interest rate hike on September 21 to offset economic inflation—its fifth increase in 2022. Following the announcement, banks associated with the Gulf Cooperation Council (central banks of Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Oman) also raised benchmark interest rates. The British Pound Sterling takes a tumble shortly after the International Monetary Fund begins its careful watch of the currency, bulking up the value of the US Dollar.
These shifts in value may signal further impacts on commodity markets and supply chains as several reports tip-toe around China’s export slump—including a September 27 announcement by the Chinese Ministry of Commerce to alleviate challenges with credit insurance, regulatory hurdles, and cross-border infrastructure. The downturn in US and EU demand bleeds into intra-Asia trade sentiments, highlighted in key sectors of India, Thailand, and South Korea.
IATA’s 15th World Cargo Symposium took place September 27-29; highlights include the continuing growth of e-commerce, the benefits of higher airline belly capacity following a global rebound in passenger travel, and the importance of achieving net-zero cargo emissions by 2050.
Ten days after Hurricane Fiona ran through Puerto Rico, Canada, and the Caribbean, in its passage through Northwestern Florida as a Category 4 Storm. Tampa International Airport has remained closed since September 27, and Miami city officials have announced flood warnings and Florida’s Governor has lifted HOS restrictions for trucks carrying relief supplies throughout Georgia and South Carolina. Now, there are a growing number of requests to waive Jones Act requirements, while vessel congestion prompts carriers to levy Peak Season Surcharges for US-origin cargo to Latin America & Caribbean destinations.
In Mexico, recent government efforts to increase cabotage and short-distance shipping have so far yielded participation from three ports: maritime authorities in Ensenada, Guaymas, and Puerto Chiapas are the first of Mexico’s 25 seaports to implement a new discount regime for equipment use. The regime is part of revitalized efforts to establish service connections with Central America, Colombia, and US ports.
These regional developments come at a time of unpredictability for North America’s pre-eminent ocean gateway as allegations of slowed port operations in Seattle-Tacoma and Oakland raise tensions surrounding West Coast Labor Talks.
Canada officially rescinds its Covid-19 air travel restrictions on October 1, just in time for Air Canada Cargo’s launch of daily freighter services from St. John’s (YYT) to Frankfurt and Madrid.
Following the Hong Kong Government’s September 26 announcement to lift its Covid hotel quarantine policy, Cathay Pacific has announced a gradual restoration of over 200 Hong Kong-origin flights through October, providing a much needed lift in belly capacity. This will also coincide with China’s Golden Week holidays; and the easement of visa and quarantine restrictions for arrivals into Japan and Taiwan on October 11 and 13, respectively. Similar policies are also under review by South Korean officials.
Typhoon Noru made landfall in Da Nang, Vietnam on September 28 only days after passing through and disrupting port operations in the Philippines. Five airports in Vietnam’s central region pre-emptively closed on the storm’s arrival, as were inland waterway operations.
Europe, Middle East & Africa
Dockworkers at the port of Felixstowe began their second eight-day strike on September 27, leaving both Felixstowe and Liverpool closed; UK officials plan to restrict further strike action via legislation. Thankfully, decreased congestion in North Europe will allow some carriers room for cargo diversions to surrounding UK ports with minimal impact.
Europe’s ongoing energy crisis faces further disruption on reports that a major Russian gas pipeline began leaking into the Baltic Sea on September 27, weeks after another pipeline was shut down for maintenance. According to some shippers, the growing fuel shortage has led to factory shutdowns and a general weakening demand for container ships. Dutch shipping council Evofenedex also raised concerns over a state decision to cut 60,000 flights annually from Amsterdam Schiphol Airport to combat climate change, warning that cargo capacity will see significant setbacks if exceptions are not made for air freight.