Freight and Logistics News and Market Update

Air

• The global air freight market continues to show strong performance, with July marking the eighth consecutive month of double-digit growth in 2024. Additionally, this year’s July rates were 20% higher than July 2023, as capacity struggles to keep pace with eCommerce demand from Asia, particularly in anticipation of an extended peak season for the eCommerce and consumer electronics sectors.
• Boeing factory workers may go on strike as labor negotiations remain at an impasse, with the union president indicating that both sides are still far apart. The current labor agreement, set to expire on September 12, could lead to walkouts that disrupt the production of Boeing’s 737-MAX if a new deal is not reached. Boeing has stated its commitment to securing a new agreement that is fair to both parties.
• Atlas Air is investing in expanding its network, fleet and operational capabilities to capitalize on the growing demand in transpacific eCommerce trade. The carrier is currently negotiating to establish a dedicated operations base in Alaska to better manage eCommerce volumes from the Asia-Pacific region. Additionally, Atlas Air expects to expand its fleet with eleven new aircrafts, including three recently leased 747-8 cargo planes.

Ocean

• Rail container dwell times at the Los Angeles-Long Beach port complex have nearly doubled as the port enters its busiest season, with some terminals reporting average dwell times of over nine days. The Pacific Merchant Shipping Association (PMSA) noted that rail boxes experiencing prolonged delays have increased, with nearly 28% of rail containers seeing dwell times of nine days or more in July. Port officials are concerned that these delays could worsen due to seasonal import surges, potential disruptions on the East and Gulf coasts and ongoing rail congestion issues in other regions.
• Some terminals at the Los Angeles-Long Beach port complex have seen rail dwell times nearly double as the busy season approaches. The Pacific Merchant Shipping Association (PMSA) reported a one-day increase from June to July, with around 28% of rail containers experiencing dwell times of nine days or more, according to the Port of LA’s website.

Air

• Global air cargo demand remained robust in July, with a 13.6% year-over-year increase. In Latin America, demand grew by 11.1% compared to the same month last year, while capacity in the region increased by 9.4%, slightly trailing the global trend but still reflecting strong market performance.
• Delta Airlines has announced that it will discontinue its New York JFK to Bogotá route due to declining consumer demand. The service will continue until late October, after which Delta will maintain its flights to the Colombian capital through its Atlanta hub.

Ocean

• The launch of the new Panama Canal booking system, which allows customers to make multiple bookings in a single transaction, has been postponed from September 1 to October 1.
• Viracopos Airport has launched a new Sea-Air program for multimodal cargo transportation, combining air, sea and road logistics. It is the first hub in Brazil to offer cargo consolidation services from ocean transport for air distribution across the country.
• The MSC Marie set a new record as the largest cargo vessel to traverse the Panama Canal, with a capacity of 17,640 TEUs, surpassing the previous record held by Evergreen’s Ever Max by over 300 TEUs. While water levels in the region are improving, some restrictions remain due to drought conditions, but the canal's operations are returning to typical levels.

Air

• Transpacific air cargo rates saw significant growth in August, with rates from Hong Kong to North America up nearly 23% and rates to Europe rising by over 21% compared to 2023, despite a slight dip in July. The continued volume driven by eCommerce shippers out of APAC hubs, combined with geopolitical instability in the Middle East and potential labor strikes, is expected to keep rates elevated as Q4 approaches.
• Cathay Pacific canceled several flights after discovering an engine issue during a departure from Hong Kong, which affected multiple A350 aircrafts in its fleet. The issue was found to impact nearly a third of Cathay’s 48 A350s and the aircraft will remain grounded until repairs are possible, which they expect to be by the weekend. Currently, there are no reports of similar issues from other carriers, and Cathay is investigating the problem to ensure fleet safety.

Ocean

• The new GLX (Gulf Asia Liner Express), CMX (Central China Middle East Express) and SMX (South China Middle East Express) services will connect ports in East Asia to the Middle East and enhance the frequency of shipments on this trade lane.

Air

• Lufthansa has announced the resumption of flights to Tel Aviv this week after suspending the service in August due to escalating conflict in the Middle East. While flights to Tel Aviv will resume, services to Beirut remain suspended and are not expected to restart until at least the end of September.
• With the end of the busy Transatlantic summer travel season, capacity is expected to shift towards the Asia-Europe trade lane, reducing availability on the Transatlantic route. As capacity decreases and demand remains consistent, rates are likely to rise in the coming months, particularly as the Q4 peak season approaches.
• Ben Gurion Airport in Israel announced a closure of all arrivals and departures on September 7 at 8:00 AM due to a strike. This closure is expected to add further delays and congestion to an already strained air traffic lane.

Ocean

• The peak season for ocean freight on the Asia-Europe trade lane appears to be winding down as demand and rates begin to drop from the elevated levels seen earlier in 2024. Reports indicate a 10% decrease in bookings for September, though expectations of a strong fourth quarter remain.

Air

• Xeneta reports that Bangladesh’s air freight rates remained elevated in August due to ongoing supply chain disruptions caused by widespread protests. Air freight rates surged 163% year-over-year for the week ending August 25, with prices reaching $4.77 per kg to Europe and $6.91 per kg to North America.
• Qatar Airways has acquired a 25% stake in South Africa's Airlink as part of its strategy to strengthen operations in Africa. This acquisition will enhance the partnership between the two carriers, including expanded code-sharing agreements, and support Qatar Airways' growth ambitions in the region. Airlink’s cargo network currently connects 40 destinations across Southern Africa.
• Saudia Cargo has launched its ‘Landing in China in 24’ campaign to strengthen its presence in the growing Chinese air freight market and develop new logistics solutions. This initiative aligns with Saudi Arabia’s Vision 2023 goals to boost exports and is closely tied to the ‘Made in Saudi’ program, aimed at promoting Saudi products globally.

Ocean

• Adani Ports has announced the acquisition of Singapore-based Astro, a supplier of offshore support vessels, for $185 million in cash as part of its strategy to expand and seize overseas growth opportunities. The acquisition will add 142 tugs and dredgers to Adani Ports' fleet, enhancing its capacity to serve major customers.
• India's Prime Minister Narendra Modi laid foundation for the Vadhvan deep-water port in Palghar near Mumbai on August 30. The new port, which will be three times larger than JNPT, is expected to double the country's container capacity to 298 million metric tons. The project, estimated to cost INR 76,220 crores, will provide direct access to key international shipping routes.
• Abu Dhabi’s AD Ports has acquired a stake in Egypt’s shipping services firm Safina as part of its ongoing expansion efforts. Safina specializes in providing agency services and maritime logistics for shippers in the metals, minerals and fertilizers sectors.

Ground

• A.P. Moller Maersk, in partnership with the Saudi Ports Authority (Mawani), has launched the largest state-of-the-art logistics park in the Middle East at Jeddah, Saudi Arabia. Covering 225,000 square meters, the facility aims to enhance Saudi Arabia's logistics capabilities and support its economic growth by providing integrated logistics solutions. The park will also facilitate the export of Saudi goods to international markets, strengthening the Kingdom’s global trade connections.
• Dubai's Jebel Ali Port achieved a new milestone in July, handling a record 1.4 million TEUs, a 3.9% year-over-year increase in container throughput. This surge is largely attributed to an increase in cargo shipments from major Asian markets, including China, South Korea and Japan, reflecting the port's pivotal role in supporting Dubai's expanding economy.
• Aramex, a global logistics provider, has secured General Distribution Practice (GDP) certification for Quality and Freight in the UAE. This certification strengthens Aramex's ability to manage healthcare and pharmaceutical shipments, ensuring compliance with international quality standards and reinforcing its position in the UAE’s healthcare logistics sector.

• Single B2 adjustments, blanket B2 adjustments or voluntary disclosure requests submitted to the Canada Border Services Agency (CBSA) effective September 1 will be subject to processing delays. To avoid delays, importers should avoid submitting such requests to the CBSA between September 1 and October 20, 2024. Instead, they may submit an adjustment request against a Commercial Accounting Declaration (CAD) in CARM. Learn more at CBSA Customs Notice 24-25.
• The Government of Canada intends to impose a 25% surtax on Chinese steel and aluminum imports under section 53 of the Customs Tariff effective October 15, 2024, except for goods already in transit to Canada on that day.  The final list of affected products will be released by October 1, 2024. The government will review these steel and aluminum surtaxes within one year of implementation and may extend or expand the measure as necessary.
• Consultation is open until September 20, 2024 by email at tariff-tarif@fin.gc.ca (including "Steel and aluminum surtaxes" in the subject line) or by mail to International Trade Policy Division (Steel and Aluminum Surtaxes). View full comments submission details at Surtaxes on Chinese steel and aluminum (Canada.ca).
• As of October 1, 2024, a 100% surtax will apply to all Chinese-made EVs imported into Canada, including electric and hybrid passenger vehicles, trucks, buses and delivery vans. The affected imports are listed at Surtax on Chinese-made Electric Vehicles (Canada.ca).Importers should consult Canada's Customs Tariff Page for precise descriptions.
• The FDA is proposing a rule mandating that submission tracking numbers for imported electronic nicotine delivery system tobacco products be provided in the Automated Commercial Environment (ACE) at the time of entry. The FDA anticipates that this requirement will enhance the efficiency of the import review process by minimizing the need for manual reviews. The agency explains that the automated system would match the submitted tracking number with internal database records to determine if a "may proceed" message can be issued. However, this automated approval would not signify that the product complies with all FDA regulations and would not prevent future regulatory action by the FDA. Comments open until October 15.
• The Biden administration has indicated further delays in granting Section 301 tariff exclusions on imports from China. The U.S. Trade Representative (USTR) sought public input on excluding certain machinery under Chapters 84 and 85 of the HTSUS and outlined required information for exclusion requests. A follow-up notice added more details, but there's still no plan for retroactive exclusions on goods imported since March 2022. Companies affected should consider submitting comments to USTR. Once approved, USTR will open a new portal for exclusion requests, allowing for objections and rebuttals.