- We would like to share our latest update on the Covid-19 virus.Ocean Freight:General Market Overview / Sea freight VolumesContinuing the trend of previous updates, with COVID-19 restrictions being lifted further and as we move into the peak months of the Year, volumes into the UK & Europe continue to rise at a steady weekly rate.Container Volume at major Chinese Ports increased in mid-JuneThe container volume of eight major Chinese ports increased 2.5% year-on-year during the period of mid-June. The cargo throughput at major coastal ports increased 2.4%.The export container volume increased 0.2%, of which the growth rate of Xiamen port, Guangzhou port, and Shenzhen’s Yantian port exceeded 10%.Domestic container volumes increased 9.3%, while the growth rate of Tianjin port, Shanghai port, Ningbo-Zhoushan port and Guangzhou port exceeded 10%.The resumption of port operations among Yangtze river ports is slower than coastal ports. In mid-June, the cargo throughput and container volume of three major Yangtze river ports, Nanjing, Wuhan and Chongqing declined 11.8% and 6.9% year-on-yearCarrier Alliances / Service UpdateDespite the continual increase in volume, vessel capacity in the Asia Europe trade is still well below pre-COVID-19 levels. It stood at a weekly 361,100 TEU as of the 1st June, which is 74, 300teu (or 17.1%) lower than a year earlier.As per our last report; the 2M (MAERSK & MSC) maintain temporary suspension of their largest Asia – North Europe loop. There is no news yet on when this will return. With this temporary withdrawal of the AE2/Swan loop, the 2M blanked an additional 13 sailings on the trade lane, removing an estimated 22 per cent of its capacity.It was also highlighted previously the withdrawal/ suspension of THE Alliance’s FE4 service into Southampton (Europe) – where the services of the FE2/FE3 were then merged to offer a London Gateway instead. The scheduled return of the FE4 remains for September this Year. However today THE Alliance have advised that will now resume, albeit on a temporary basis, for 3 sailings starting at the end of July. This is fundamentally to sweep up the increasing ‘roll-pool’ volume that has accumulated.Other / similar type actions are / will be implemented by the other Consortiums – e.g. the 2M launching a seasonal Asia – Europe loop named ‘Griffin’. A 14,036 TEU vessel (the MSC TARANTO) has already sailed here and whilst Maersk has announced this service as a kind of ‘sweeper’ operation offering three or four extra sailings in the summer months, MSC has described it as an additional fortnightly loop. Although the seasonal ‘Griffin’ will only fully materialise if demand growth can sustain it. Whilst this may be a positive given the supply v demand, particular to the UK the transit times are lengthy, i.e. circa 40 days plus from the key China load ports into Felixstowe.THE Alliance and 2M Asia – European capacities are 22.7% and 18% lower than last year, which is largely due to the suspension of services. As the OCEAN Alliance has not suspended an entire service and has only voided individual sailings to limit capacity, the capacity offering of the COSCO Group, CMA CGM and Evergreen is down by only 12.4% compared with 1 June 2019. This also explains why the market share of the OCEAN Alliance has increased from 37% to 39% at the expense of THE Alliance (from 25% to 23%). The 2M market share remains unchanged at 37%.Asia – Europe Market Rate Levels (FAK Freight Rates for August)Leading container carriers saw between 10% and 35% of their stock value wiped off in the first half of the Year as COVID fears griped investors.With volumes increasing yet reduced capacity (space availability) in the market, given the above the Carriers continue to drive / apply higher rate levels in the market.Like July’s announcements, the carriers are indicating August FAK levels @ circa $2400usd x 40ft plus. This and previous increases are also reflected in the Shanghai Freight Index (SCFI).Regional Updates (Vietnam & Cambodia)Vietnam: Free Trade Agreement With Vietnam; The European Commission has published the final text of the trade agreement with Vietnam which can be found here, which comes into force on 1st August 2020. The Agreement covers both imports from Vietnam and exports to Vietnam. Entitlement to preference duty shall be based on an origin declaration made out by the exporter.The text for an origin declaration to be made on, for example, the commercial invoice or packing list, is in Annex VI to Protocol I on Official Journal page 1378. Some duty rates will be changed from day one, while others will be phased in over time. Further information can be found in Annex 2-A of the Agreement beginning on page 166.Under the current GSP arrangements which apply to UK imports during the transition period, Vietnam will lose GSP beneficiary status two years following the entry into force of the FTA with the EU. When the UK leaves the Transition period, Vietnam will continue to benefit from the preferential tariff treatment under the UK GSP until the entry into force of a UK-Vietnam trade arrangement. There will be a notice period before Vietnam is removed as a beneficiary of the UK GSP arrangement.For further information, contact the ACS Customs Team who would be pleased to assist you.Cambodia: Withdrawal of Preference; The European Commission has decided to withdraw part of the tariff preferences granted to Cambodia under the European Union’s Everything but Arms’ (EBA) trade scheme, due to the serious and systematic violations of the human rights principles enshrined in the International Covenant on Civil and Political Rights. The decision will affect selected garment and footwear products and all travel goods and sugar. This is currently due to take effect on 12th August 2020.Further information can be found by following this linkPort Operations/ UpdateWe continue to see stability at UK ports with some exceptions which occur erratically. For example:
- 30th June – Southampton quay – 03.00hrs to 10.00hrs – Vehicle Booking Slots (VBS) unavailable leading to backlogs and delays for collecting units.
- 9th July – Southampton quay – 3/4hr delays and lack of VBSs.
- 14th July – Felixstowe port system (Ngen) was taken offline by the rail operator for updating. Leading to delays and several cancelled loadings.
- 14th July – Felixstowe to Hams Hall train has stopped at Witham due to an air leak found in a break pipe. The train will be repaired but will be delayed arriving at the Hams Hall terminal.General Item of NoteImports of Personal Protective Equipment (PPE); PPE purchased by care homes, businesses, charities and individuals to protect against Covid-19 will be free from VAT until the end of October 2020. The formal announcement can be found here.Air FreightThe Global Covid-19 crisis continues to have a major impact on the air freight industry which continues to this date. Carriers are still not offering contract rates till further notice.
- Block space agreements are still not available.
- Carrier availability has increased but is still changing with little or no notice.
- Flight cancellations still occurring due to lack of booked cargo.
- Global suspension of passenger flights and the trend of these planes operating as freighters. Until increased passenger numbers return, schedules will remain limited.
- Charters, part charters and PAX charters are being utilised and are available ad hoc.
- Most current movements are transactional, and we have started to see a slight increase in volumes since lockdown was eased.UK Airports. Import / ExportInbound + Outbound freight is still flowing through with no disruption; volumes are, however, still significantly down.As the effects of the pandemic continue to be felt by the aviation industry, airlines and UK ground handlers are still operating with reduced manpower and are consolidating cargo business at all major airports. The peak covid-19 surcharges are still applicable by carriers + ground handlers.China: The CN market continues to improve and rate levels in general are continuing to reduce. Volumes remain strong but capacity is still tight due to the ongoing reduction in PAX services. Medical supplies are still the top commodity but have started seeing other verticals increasing.Shanghai: Capacity levels out of PVG remain steady but with PPE volumes continuing to be strong, capacity vs volume is levelling up. As a result, rate levels are starting to hold.Guangzhou: PAX freighter capacity is increasing throughout Southern China and services are more stable with 5 – 6 days advanced booking required. Although there is an increase in capacity, demand for direct services is still very strong. Deferred services have limited capacity through 2nd leg transhipment hubs.Xiamen: Demand out of XMN is increasing steadily and the lack of capacity is holding rates up. Rates remain unstable, fixed only at the booking confirmation stage.Qingdao: Capacity is tight ex TAO due to the limited number of PAX freighter options; we are seeing more carriers reintroducing services but on limited schedules.Beijing: As with all of China, BJS remains unstable regarding rates and services, available capacity restricted due to ongoing passenger flight cancelations. Origin dwell remains close to 7 days and uplift / rate level only confirmed at final booking stage.Hong Kong: Capacity levels are steadily increasing from HKG and its reported that BA will resume PAX flight operations in mid – late July. The e-comm market has seen a recent surge in demand and so far, levels are continuing through July.India: The situation within India continues to deteriorate with the number of Covid-19 confirmed cases and deaths increasing steadily. India is one of the worst hit nations behind Brazil and the US. Further restrictions and lockdowns are being imposed across all states in a bid to try and control the spread. Except for freighter, humanitarian and repatriation flights, all international passenger services will remain suspended.Services are improving gradually as more carriers reintroduce PAX freighter options, but rates are fluctuating and uplift driven by the transit hub approval.Bangladesh: Due to current increases in Covid-19 infections and fatality rates, the Government of Bangladesh has extended the current lockdown restrictions to be reviewed throughout July. With no PAX services operating, the only option to move cargo is on either full freighters or PAX converted freighters. Freight rates have now seen a steady decline as volumes start to pick up from this region.Sri Lanka: Capacity remains limited out of CMB in these early stages of coming out of lockdown. Only limited carriers have reinstated services and rates are ad hoc and only fixed at booking stage. Rates are still high from this region with no change for the last three weeks.Mauritius: The situation in MRU continues to improve and the country has now fully reopened. No new Covid-19 cases reported over the last 2 months. Capacity levels have increased out of MRU and are expected to continue as available volume increases. With more EU routes opening and plans to reintroduce PAX services from August 1st it is expected that rate and service levels will return to some sort of normality over the coming weeks.Pakistan: Although Pakistan has entered a second lockdown phase due to a significant increase in new cases of COVID-19 the airfreight situation remains unchanged. Capacity ex. Pakistan in general remains limited and rate levels remain artificially high. Both LHE & KHI airports are now open for carriers but with limited schedules, the market is starting to open but both Covid-19 infections and fatalities are continuing to increase.Korea: The Korean market remains very fluid, there have been ongoing signs of improvement in capacity and rates throughout July, but we expect the rate decline to slow until we see a further change in volumes. Capacity ex ICN is starting to increase as more carriers reintroduce both freighter and PAX freighter schedules. There has also been an increase in PAX services to specific destinations with approx. 30% of passenger services returning to some sort of “normal” operations.Singapore: No significant change in the SIN market over the last 2 months and there are early signs of the local situation improving. The rate levels have been stable for the last month but are nowhere near traditional market levels.Vietnam: The majority of PAX schedule have been suspended out of VN; PAX freighter services continue to operate but with limited capacity. Origin dwell is sitting between 5 – 7 days. The situation in Hanoi and Ho Chi Minh are similar as certain restrictions are being lifted throughout Vietnam and overall the situation seems to be improving. Although the restriction on Int’l passenger flights remains largely in place, domestic movements are now operating for moving general cargo. Freighter services are still the main option.Cambodia: Although all International passenger movements are still suspended, PNH airport is operating normally. PAX freighter services are increasing as is available cargo and as a result rates have dropped steadily throughout July. This again is not at traditional levels. Passenger services remain suspended in and out of PNH, but airport operations are running normally with regular freighter services.Other Origins: Space and capacity are available on ad-hoc request. Rates are fluctuating and are normally confirmed once carrier booking is achieved. Please contact your client manager on any ad-hoc enquiries.Road FreightACS Overland in Mainland Europe continues to operate as normal currently and there are no border delays throughout Europe. Scheduled transit times are being maintained Services ex Turkey and North Africa remain unaffected, with FTL’s departing daily and groupage twice weekly. Likewise, in Central and Eastern Europe. Our owned offices and partner network continue to offer departures as per our standard schedules in the table below.Road Freight Service Schedule *Service information is listed below for our operations from/to ACS Heathrow freight terminal. For further information or a quotation please contact us and we will be pleased to provide any assitance possible.* ACS Operations 17th July 2020