It’s been a little over eight months since the Ever Given lodged itself in the…
New air cargo data suggest global demand in April fell 8% year-over-year, attributed to the ongoing Russia-Ukraine conflict, recent Covid-19 lockdowns in China, enduring labor shortages, and a growing deficit in consumer demand. The US joins Canada and European nations to ban Russia-affiliated vessels from berthing American ports, and dockworkers around the world have refused cargo from Russian ships in protest. Conversely, crude oil prices have steadily gained and fuel inventories are in shock over the stoppage of Russian gas, adding to transit costs in Europe and elsewhere. Though approved, long term US oil contracts won’t stave off Europe’s fuel crunch until 2024—some 2 million barrels of U.S. crude were recently delivered to Bilbao Port via supertanker.
Many industry executives are unsure if Transpacific-Eastbound sea freight volumes will rebound by the end of first quarter according to the excerpts of several earnings calls. Shanghai’s continued lockdown has diminished export demand by as much as 15% over the past two weeks, although the city’s ports remain in operation. Carrier alliances have blanked more sailings through June to adjust for the loss, bringing market volatility to Asia-Europe and Asia-Americas trade lanes.
West Coast labor talks began earlier this week as Transpacific-Eastbound delays rebound upward, with 35 vessels waiting to berth the ports of Los Angeles and Long Beach on May 9. US Atlantic airports see weakening cargo demand on top of consistent transit delays and rising fuel costs; whereas in Chicago and Dallas-Fort Worth, cargo operations have reportedly normalized.
Following China’s Labor Day holiday, Beijing continues mass-testing residents while Hong Kong eases lockdown restrictions. Local KWE sources indicate that although daily cases have decreased, business operations in Shanghai may take longer than expected to fully recover.
The ongoing lockdown has also increased transit times on intra-Asia trade routes, compounded by rumors of upcoming blanked sailings ex-China by carrier alliances. Market conditions in Southeast Asia are also beset by Sri Lanka’s prolonged financial crisis and ensuing protests, which have repulsed transshipment demand from Colombo Port.
Europe, Middle East & Africa
As problems mount navigating the fallout from the Russia-Ukraine crisis, key ports in Europe such as Rotterdam, Hamburg, Antwerp, are working at or above capacity with little to no space to store container imports. Adjacent to the Black Sea, Constanta Port now serves as Ukraine’s export hub after several mines were observed floating at the mouth of the Danube River.