DSV-Panalpina Market update - March 2021
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DSV-Panalpina
Market update
March 2021
1 | DSV – Market update Air & Sea March 16th , 2021
Content
1 COVID-19 Overview
2 Ocean freight update
3 Airfreight update
2 | DSV – Market update Air & Sea March 16th , 2021
More than 359.4 million vaccine doses have been administered
worldwide, equal to 4.7 doses for every 100 people
There is already a stark gap between vaccination programs in different countries, with many yet to report a single
dose.
Per 100 Total doses Fully
% Vaccinated
people administered vaccinated
Dosis administered per 100 people World 5.0 381,270,135 – –
Israel 107 9,491,511 59% 48%
Seychelles 91 88,106 63% 28%
U.A.E. 68 6,578,881 – –
Maldives 41 212,711 – –
U.K. 39 26,063,501 37% 2.4%
Chile 37 6,994,820 26% 11%
Bahrain 36 566,796 22% 14%
United States 33 109,081,860 21% 12%
Serbia 29 2,040,313 18% 11%
Malta 25 122,366 17% 8.2%
Denmark 14 834,041 10% 4.3%
https://www.nytimes.com/interactive/2021/world/covid-vaccinations-tracker.html
3 | DSV – Market update Air & Sea March 16th , 2021
Global COVID-19 Freight Restrictions Overview
With new mutation of “British COVID” travel restrictions have increased with more passenger flights cancelled.
COVID-19 Travel Regulations Map as per IATA
EUROPE
ASIA PACIFIC
Europe lockdown: Travelers are subject
to a 7-day isolation period and take China: China has restricted entry and
another COVID-19 PCR test at the end transit to all travelers except Chinese
of this period. nationals, Hong Kong, Macau, or Taiwan
passport holders, and travelers with
Restrictions will be revised on March. diplomatic, service, courtesy, or C visas,
or visas issued after March 28, 2020.
UK: From March 8, passenger traveling
abroad will need to carry a new travel South East Asia: Most countries have
declaration form stating that their trip is banned the entry until end of January
permitted under UK national lockdown with potential extension
rules..
INDIAN SUB-CONTINENT.
NORTH AMERICA India:.Re-opening soon.
Source:https://www.iatatravelcentre.com/world.php
Cargo planes are allowed to enter the
People who has been in EU and UK country.
during last 14 days or residents from
those countries are banned the entry to Sri Lanka: Flights has been suspended.
USA, this does not apply to nationals or
permanent residents in USA AFRICA and MIDDLE EAST Bangladesh and Pakistan: Passengers
must present a negative PCR before
LATIN AMERICA South Africa All passengers must present a negative corona virus test and they are only entering
allowed to travel to 3 airports, Cape Town, Durban and Johannesburg.
Uruguay; Passengers are not allow to
enter
All flights from UK are suspended to Saudi Arabia Restrictions to travellers coming from Argentina ,Brazil, India South Africa
Argentina, Brazil, Chile etc and United Kingdom
4 | DSV – Market update Air & Sea March 16th , 2021
Ocean freight
Update
5 | DSV – Market update Air & Sea March 16th , 2021
Port Congestion is now a critical issue in USA and EUROPE
Long berthing delays and a lack of available ships fleet limit options for further capacity growth
US Port congestion (New York, Savannah, Houston and Los Angeles
Average port congestion (days) Europe Main ports
• Port congestion is becoming an issue in Europe having some weeks with over 3 days of delay, this is affecting the Transatlantic trade where
bookings needs to be place 30 days before
• The various vessels anchorage waiting to get access to the ports of discharging are one of the drivers for the ongoing equipment constraints in
the global trades.
• Carriers are still announcing void sailings to avoid more congestion on the ports (both Asia, US and Europe)
Source: Alphaliner and Seabury
6 | DSV – Market update Air & Sea March 16th , 2021
Trade container imbalances remains high
Global growth split on headhaul and
backhaul
• The pandemic has caused a higher than usual level of trade
imbalance between head haul and back haul trades, which
will continue to put pressure on the ability of carriers to
reposition equipment in the coming months.
• The shortage of equipment being generated on a monthly basis
compared to the annual average continues at a historically high
level. This is fundamentally driven by large demand increases on
the Transpacific trade.
• But given that equipment issues are relevant to all trades, this
means that the imbalance issues predominantly stemming from
the Transpacific continues to impact all trades globally. Should
demand be normalised rapidly, we would still need to re-
balance the effect seen in chart local Shenzhen volunteers and
police
Source: Seaintel
7 | DSV – Market update Air & Sea March 16th , 2021
Trade Update
Container shortage & Poor schedule reliability
Asia Pacific Equipment Situation
• All equipment types remain tight across Asia.
• Capacity discipline among carriers is expected to
continue.
• Shipper should consider booking as early as
possible 3-4 weeks in advance.Schedule reliability
may not see improvement until second quarter of
2021.
S= SURPLUS OF CONTAINERS
D= DEFICIT OF CONTAINERS
8 | DSV – Market update Air & Sea March 16th , 2021
Worst vessel performance ever recorded: 34,9%
Global Port congestion is increasing transit time to now almost 7 days
Schedule Reliability Average delay of late vessels
7.00
90.0%
80.0% 6.00
70.0%
5.00
60.0%
4.00
50.0% 2020
2020
40.0% 3.00 2021
2021
30.0%
2.00
20.0%
1.00
10.0%
0.0% 0.00
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Source: Sea-Intelligence Maritime Analysis
9 | DSV – Market update Air & Sea March 16th , 2021
Bunker price development start to increase also the gap of
VLSFO
800
700 VLSFO
IFO380
600
• Following a sharp drop in bunker fuel
500 prices in Mar-Apr 2020 due to the
pandemic, prices then have started to
400 rebound and stabilize
300
• Fuel price have begun to increase
significantly Jun – early Nov 2020
200
• Can anticipate for BAF increase in line
with the continuing upward trend in
100
VLSFO price
0
Source: Ship&Bunker
10 | DSV – Market update Air & Sea March 16th , 2021Ocean Freight Asia - Europe
Small drecrease but near all time high
SCFI – North Europe WB Rate Index
(US$/40ft)
Rates reducing at slow pace
$9.300
SCFI Levels Week 10-2021:
$8.300
• Shanghai – North Europe: USD 8,040/ FEU
$7.300 • Shanghai – Mediterranean: USD 8,664/ FEU
$6.300
Rates remain at high but stable levels which are
$5.300 expected to persist into March
$4.300
• Equipment shortage remains a challenge in the coming
$3.300 weeks.
$2.300
• Some carriers are also accepting limited UK cargo
$1.300
again.
Source: SCFI Week 10
11 | DSV – Market update Air & Sea March 16th , 2021Ocean Freight Asia - North America
Rates remain at all time high levels
SCFI Transpacific EB Rate Index (US$/40ft)
$4.300
Space and equipment is opening up
$3.800
SCFI Levels Week 10-2021:
• Shanghai – US West Coast: USD 3,999/ FEU
$3.300 • Shanghai – US East Coast: USD 4,786/ FEU
$2.800 Booking time stills 21 days before
• Equipment situation is improving
$2.300
• There is still a strong demand in the trade and it is
expected new services and capacity to be added
$1.800
Source: SCFI March 2021
12 | DSV – Market update Air & Sea March 16th , 2021Ocean Freight Asia – South America (East Coast)
Reduction of rates still at high levels
SCFI to Santos Brazil (US$/40ft)
$17.000
$15.000 SCFI Levels Week 10-2021:
• Shanghai – Santos: USD 14,746/ FEU
$13.000
$11.000 Allocation of space is a big problem in the trade
$9.000
• vessels are utilized on both ECSA and WCSA. All
$7.000 sailings are fully booked, with a few exceptions.
Utilization is 100% and Bookings are above 150%,
$5.000
• Booking’s minimum a month in advance as vessels are
$3.000 already full
$1.000
• This is the trade with the higher price per nautical miles
out of Asia.
Source: SCFI Week 02-2021
13 | DSV – Market update Air & Sea March 16th , 2021Ocean Freight Europe – Asia
Full ship scenario continues
Drewry Rotterdam Shanghai (US$/40ft)
$2.000
Drewry Levels Week 05-2021:
$1.900
• Rotterdam – Shanghai: USD 1,465/ FEU
$1.800
$1.700
Allocation of space is a big problem in the trade
$1.600
$1.500 • Some carriers have introduced temporary booking stops
$1.400 in order to cope with the surging export demand
$1.300 • Port congestion and the on-going equipment shortage is
$1.200 creating massive operational challenges
$1.100
• Several Post-CNY blank sailings expected for 2nd half
$1.000 of March/early April. Details to follow
Source: SCFI Week 02-2021
14 | DSV – Market update Air & Sea March 16th , 2021Ocean Freight Europe – North America
Rates are increasing – Bookings required well in advanced
Drewry Levels Week 10-2021:
• Rotterdam – New York: USD 4,500/ FEU
Drewry Rotterdam New York (US$/40ft)
$4.000
$3.800
Bookings need to be places 6-8 Weeks in advanced
$3.600 • Rates are being added various surcharges like PSS,
$3.400 EIS, EBS etc. Expect a GRI to be announced in
February to become effective by latest April 1, 2021
$3.200
$3.000 • Equipment deficit in most origin regions in Europe. This
$2.800 will remain the biggest issue for quite some time.
Carriers charge EIS/EBS to cover empty moves,
$2.600 although no guarantee from carriers that they can
$2.400 provide the needed containers.
$2.200
• Port concession is adding to the problem, situation is
$2.000 critical
• Bunker oil prices are on a upturn, we expect carriers to
charge higher BAF in March + Q2
Source: Xeneta Week 10-2021
15 | DSV – Market update Air & Sea March 16th , 2021Ocean freight market overview – All time high as a ”new normal”
TRADE LANE COMMENTS RATES AND SPACE
• Situation is improving slightly but still remains tensely at some locations.
ASIA to Europe • Space is still tight from China and there is equipment shortage (specially 40’)
• Long term rates will increase due to BAF
• Rates steady at historical highest levels.
ASIA to NAM • Equipment shortage, specially in Vietnam and South east Asia.
• Ships are waiting at anchor in LAX, Oakland and Savannah
• The need of equipment is affecting all trades globally
• Vessel are full and less capacity available
Europe to NAM
• Congestion (Port facility) surcharge for the port of New York applied by Ocean Carriers. This
is applicable for all cargo to and from Europe
• Rates:Trade uncertainties due to country political situation
Exports from
• Space is tight
India
• Booking needs to be placed one month in advance
ASIA to LATAM • ASIA to LATAM due to longer transit times needs to offset with higher rates
• Rates are stable
• Port congestion at most of Asian ports
• New bunker level. Australian ports are still congested but improving
INTRA ASIA
• Equipment under serious shortage, (long haul trades receive the equipment before intra
Asia)
16 | DSV – Market update Air & Sea March 16th , 2021Airfreight Update 17 | DSV – Market update Air & Sea March 16th , 2021
Air cargo capacity declined 15% compared to the same
weeks in 2019
We are now running a full year (COVID out break) and we will be able to compare in similar
terms
Total air cargo capacity growth, last two weeks vs same weeks 20191,2
% growth vs last year
Global capacity decline: -17%
Asia Pacific returned to ‘flat’ growth over the last two weeks
Note: Arrow thickness representative of May 2020 capacity, direct flights only; all flows indicate region-to-region capacity; regions are indicated by color coding; all dates measured in UTC; 1) Total cargo capacity includes
international widebody passenger and all freighter flights; 2) Comparing capacity between 22 Feb- 7 Mar 2021 to capacity the same weeks in 2019; Source: Seabury Consulting Capacity Tracking database, Seabury Consulting Source: Seabury
analysis (March 2021)
18 | DSV – Market update Air & Sea March 16th , 2021After a decline during Chinese New Year, air cargo capacity
bounced back in the last two weeks
Weekly international air cargo capacity, Feb 2020 – Mar 2021
Thousand of tons
• Increase in air cargo
capacity was both for
passenger and freighter
operations
Note: Direct capacity only; All freighters and widebody passenger aircraft only, Date measured in UTC time; 1) Corrected for day-of-week fluctuations, smoothened
for clarification; 2) Comparing 11 - 24 Jan 2021 to 13 - 26 Jan 2020; 3) Comparing the daily average for 28 Dec – 10 Jan 2021 vs. 11 – 24 Jan 2021; Source:
Seabury Consulting Capacity Tracking database, Seabury Consulting analysis (January 2021)
19 | DSV – Market update Air & Sea March 16th , 2021Traffic Scenarios for December to June 2021
Air traffic throughout Europe is expected to be approximately 66% down in February 2021
compared to January 2019 and the situation is quickly deteriorating.
EUROCONTROL Draft Traffic Scenarios
20 March 2021 (base year 2020) • The ‘Coordinated Measures’
Scenario is based on there being a
common approach to putting in place
operational procedures and lifting
national restrictions.
• This is a major requirement of both
airlines and airports to support their
recovery.
• The ‘Uncoordinated Measures’
Scenario assumes that this common
approach does not materialise.
• Overall, the Coordinated Measures
Scenario envisages a loss of 45% of
flights (5 million) in 2020, while the
Uncoordinated Measures
• Scenario would result in the loss of
57% of flights (6.2 million).
check the AIU dashboard: https://www.eurocontrol.int/Economics/DailyTrafficVariation-States.html
20 | DSV – Market update Air & Sea March 16th , 2021A higher demand from the UK to mainland Europe has led to
an increase in cargo capacity, potentially driven by Brexit
Weekly capacity from UK to mainland Europe, Jan – Mar 2021 vs 2020
% Tonnes
Widebody belly capacity has
increased the most, with
Germany, Belgium and
Luxemburg
and the Irish Republic seeing
the highest absolute growth
Note: 1) Year-over-year growth rate compared to the same weeks in 2020, using average growth rates for visual purposes 2) Top 4 destinations by capacity
increase from the UK to Europe ; Source: Seabury Cargo Capacity Tracking database, Seabury Cargo analysis (March 2021)
21 | DSV – Market update Air & Sea March 16th , 2021Incheon is now the largest airport for cargo capacity, with a
21% increase compared to last year
Top 10 largest airports by capacity, Feb 2021 vs 2020 YoY (%) Rank 2020
Thousand tonnes
• All top 4 airports increased
their capacity in February
2021 compared to 2020
Note: Does not adjust for the impact of passenger freighters on cargo capacity or by differences in load factors 1) Comparing February 2021 vs 2020 2) Based on
air cargo capacity in February 2020; Source: Seabury Cargo Capacity Tracking database, Seabury Cargo analysis (March 2021)
22 | DSV – Market update Air & Sea March 16th , 2021Air freight market overview
Many shipper are preparomh their cargo out of factories before CNY long holiday (Started in Week 6 this year), market is
expected to be turning active from next week
TRADE LANE COMMENTS RATES AND SPACE
• North and South China markets continue to be weaker than expected due to
Exports from
new capacity
China / Hong Kong
• We see a ramp up of volumes by the end of Q1.
• North Asia (Korea/Japan) and Southeast Asia markets are very busy and yields
Exports from JP, KR and continue to climb as demand exceeds available capacity.
South Asia • The yield difference between these markets and China is approaching $4-5 per
kg.
Exports from • Lack of space and high rates
India/Bangladesh • Limited capacity available (limited PAX) and strong demand at the moment
• Trans-Atlantic market continues to be very strong in both directions as demand
outstrips capacity.
Export from Europe
• Cargo is taking between 5-7 days minimum for uplift so please plan ahead and
be patient with transit times.
• US Export market is strong to both Europe and Asia. The backlogs to Europe
are especially acute and transit times are much longer than normal. With the
Exports from NAM
continued drought of belly capacity, expect these conditions to continue into the
foreseeable future.
23 | DSV – Market update Air & Sea March 16th , 2021You can also read
