14/4/2020

Dear all Valued Customers

 

Idled containership capacity is expected to reach a record high of 3m teu within weeks in the “worst capacity crisis the industry has ever seen,” according to new data from Alphaliner. With over 250 sailings already withdrawn in the second quarter, the consultant forecasts that the lay-ups will push the idle fleet to a level twice that was seen during the 2009 global financial crisis.

 

While larger ships will be cascaded to replace smaller units on the remaining strings, carriers will be forced to idle a large part of their operated tonnage. This will affect all size segments in the coming weeks. In addition to the main Asia-Europe and transpacific trades, carriers have also reduced capacity on the Transatlantic, Latin America, Middle-East, Indian sub-continent, Africa and Oceania routes, as up to a quarter of the world’s population is in lockdown and non-essential retailers shuttered.

 

THE Alliance recently published details of more blank Asia-North Europe, Asia-Mediterranean and transpacific sailings for May and June, in response to lower market demand, including merging loops on the North Europe and Middle East trade lanes and the suspension of a transpacific string.

 

More Carriers Join the Ranks Offering Storage at Transhipment Hubs

 

The need to slow inbound container flows is growing as some retailers and manufacturers fail to pick up containers because warehouses are full or closed due to not being deemed essential service providers responding to the coronavirus, or because retailers have requested delayed deliveries at distribution centres. 

 

CMA CGM is the latest carrier to offer a “Delay in Transit” option that will allow shippers to store import containers at nine of its transhipment hubs in Asia, the Mediterranean, and the Caribbean as cargo owners adjust supply chains in response to the coronavirus disease 2019 (COVID-19). The carrier joins Mediterranean Shipping Co., which this week announced it was expanding its “Suspension of Transit” (SOT) offering by adding four more transhipment hubs, for a total of six locations, to where cargo owners can store cargo outside the marine terminal. For its part, Maersk Line is offering storage at origin ports in Asia, where goods can be quickly loaded once demand returns.

 

Shipping line COSCO is promoting a new service also called "DIT PROGRAM"--Delay In Transit via Piraeus, as a hub connection for lower storage charges. The feeder services can cover from Piraeus to Europe main ports, Mediterranean and North Africa ports.

 

Substituting Cargo for Passengers Becomes Mainstream for Airlines

 

What started out a month ago as a niche, experimental business — turning passenger aircraft into dedicated freighters for cargo customers — has exploded in popularity and become a driver of sorely needed revenue for airlines while supplying the world with critical goods.

 

In just three weeks, United Airlines has already operated 270 cargo-only flights carrying more than 9.2 million pounds on repurposed Boeing 777 and 787 jets, cargo chief Jan Krems said. Initial service was between United’s U.S. hubs and Amsterdam; Frankfurt, Germany; and London’s Heathrow Airport. Since then, United Cargo has added Brussels, Hong Kong, Shanghai, Sydney and Tel Aviv, Israel, to its all-cargo network. And later this week it will begin service to and from Chengdu, China; Beijing; and Taiwan.

 

Beginning today, Lufthansa and its sister Austrian Airlines will add 35 weekly flights with passenger aircraft operating between Europe and Asia. The schedule includes two daily connections from Frankfurt to Shanghai and one daily connection to Beijing with Airbus A330-300 aircraft. One Airbus A350-900 will take off daily from Munich to Shanghai and Beijing. The planes have about 30 tons of cargo capacity. Austrian Airlines plans to provide 16 flights a week from Vienna, with Shanghai being served eight times per week, Beijing five times, Penang, Malaysia two times and Xiamen, China, once a week. The airline will deploy Boeing 767-300 and 777-200 jets on those routes.

 

American Airlines announced Friday that it is expanding cargo-only operations as well. American flew a couple flights in late March between Dallas-Fort Worth and Frankfurt. Within a week, the Dallas-based carrier will begin operating mini-freighters from DFW to Dublin and Hong Kong; between New York (JFK) and London Heathrow; and between Miami and Buenos Aires. American said it is also planning to add cargo-only service to Shanghai and Seoul by the end of the month.

 

The airlines continued to become more creative with cargo. Some, like Delta Air Lines, added scheduled cargo service on certain routes to supplement capacity. Lufthansa, China Eastern and others filled passenger seats with boxes to maximize efficiency. Light goods, such as protective masks, are typically carried in the upper deck. Others are using special “seat bags” that modify the seat space and allow more cargo to be safely loaded. Southwest Airlines is renting planes to cargo users even though its fleet consists of narrow-body Boeing 737s that can’t fit giant containers or flat racks. And Air Canada is even offering its small, regional jets to get cargo to rural areas and tribal communities.

 

Etihad Airways is another carrier substituting passenger planes for cargo applications. It is adding five routes to the original 10 destinations served by 777 and 787 passenger aircraft in cargo-only mode. The new services connect Abu Dhabi, United Arab Emirates, with Melbourne, Australia; Chennai and Kerala, India; Karachi, Pakistan; and Amsterdam, the company said.

 

The demand for these services reflects the importance of air transport to move emergency aid, food products, e-commerce and other items to keep businesses running during a pandemic crisis in which hospitals are stressed and millions of people are quarantined at home.

 

As a valued customer, we hope that you will continue to trust us to source the best options for your supply chain needs now and into the future. Please feel free to contact your Customer Solutions Representative, should you have any queries in relation to this news.

Keeping you updated,

BRi Customer Solutions Team

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