Freight and Logistics News and Market Update - Week of January 12, 2023

• Outbound flights in the US were grounded on Wednesday morning due to an overnight outage with NOTAM (Notice to Air Missions) system. Delays and disruptions are expected while the system is restored.
• Roads in Sao Paulo city were closed earlier this week due to the ongoing riots in Brazil over political conflicts. Potential disruptions could occur.
• Covid infections continue to rise in China after the country decided to remove its zero-tolerance measures. Manufacturing orders have declined by 40% in Chinese factories due to more workers getting infected.
• Emirates and United Airlines have filed a codeshare route proposal, pending approval from the US Department of Transportation (DOT). Emirates routes are mainly focused on flights operating out of Chicago, Houston, and San Francisco, allowing Emirates to have a considerable presence in the US without utilizing their own aircraft.

Air

• Outbound flights in the US were grounded on Wednesday morning due to an overnight outage with NOTAM (Notice to Air Missions) system. Delays and disruptions are expected while the system is restored.

Ocean

• The unprecedented volume growth experienced by some of the US Gulf ports in 2022, with both Mobile and Houston reaching 16.3% and 33.9% respectively, has prompted the implementation of several major projects aimed at increasing capacity and enhancing operational efficiency.
• Container import volumes have plummeted to their lowest level in almost two years, as reported by the NRF. Declining consumer spending, high inflation, and the fact that retailers replenished their inventories early last year are some of the factors contributing to the decline.

Air

• In December 2022, the Brazilian network was operating at 105.4% capacity compared to December 2019. This is due to the addition of 366 flights that were added through 2022.
• Colombian airline, Avianca has announced a new route between Cusco, Peru and Bogota, Colombia starting March 27 with four frequencies per week. This new flight route will increase cargo capacity in the region.
• American Airlines is now offering two flights per day between Monterrey, Mexico and Phoenix, US. An increase in cargo capacity is expected.

Ocean

• Chile’s San Antonio Terminal International (STI) will be acquiring new equipment. This will allow the terminal to operate in a more efficient manner, expanding its capacity to 1.6 million TEU.

Ground

• Roads in Sao Paulo city were closed earlier this week due to the ongoing riots in Brazil over political issues. Potential disruptions could occur.

Air

• Asia Pacific region saw the greatest year-over-year decline among the regions in international air freight demand, which was driven by China’s rising Covid cases and shrinking export orders.

Ocean

• Covid infections continue to rise in China after the country decided to remove its zero-tolerance measures. Manufacturing orders have declined by 40% in Chinese factories due to more workers getting infected.

Air

• Scandinavian Airlines (SAS) announced plans to lease three Boeing 737s based in both Denmark and Finland, which will operate to major European cities and popular Mediterranean destinations in the passenger peak summer season. An increase is expected in cargo belly capacity.
• Spanish flag carrier, Iberia, is now operating daily flights between Madrid and Montevideo, Uruguay, providing additional cargo capacity between the two cities.
• From now until March 25, Lufthansa’s Airbus A340-300s will operate 17 direct flights from Frankfurt to various destinations including Mumbai, Delhi, Hong Kong, Tehran, Boston, Seattle, Atlanta, Cape Town, Nairobi, Nanjing, and Shanghai. Significant increase in cargo flow is expected.

Air

• Beginning February 6, Ethiopian Airlines will have daily flights to Guangzhou and increase its weekly flights to Beijing and Shanghai to four times a week. Starting March 1, they will being to offer daily services to Beijing and Shanghai, and continue to offer three weekly flights to Chengdu. The 28 weekly flights to China is expected to increase cargo capacity for the Chinese market.
• Beginning at the end of March, Air India will add an additional three flights to Heathrow Airport from Delhi and Mumbai, which will provide additional cargo capacity.
• Beginning March 26, Etihad airlines will provide a second daily flight to Bangkok, reaching 14 weekly flights from Abu Dhabi Airport. Cargo belly capacity is predicted to double with the additional services.
• Emirates and United Airlines have filed a codeshare route proposal, pending approval from the US Department of Transportation (DOT). Emirates routes are mainly focused on flights operating out of Chicago, Houston, and San Francisco, allowing Emirates to have a considerable presence in the US without utilizing their own aircraft.

Ocean

• Mawani, the Saudi Ports Authority, has plans to upgrade and develop two box terminals in Dammam King Abdulaziz Port worth $1.8 billion. The project is planned to expand the port’s container capacity to 7.5 million TEUs altogether, which is a 120% increase.
• Hapag Lloyd will launch a transshipment terminal in Damietta, Egypt in 2025. The planned terminal will have an annual throughput capacity of 3.3 million TEUs as well as 50 rubber-tyred gantry cranes (RTGs) and 16 ship-to-shore cranes. The port will be located in a convenient location with access to several markets including Egypt and eastern Mediterranean markets.

• Spanish bell peppers are banned from import into the US until further notice by United States Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) due to potential medfly infestation.
• The US said recently it is expanding a dispute under the US-Mexico-Canada Agreement over Canada's dairy tariff-rate quota (TRQ) policies. A TRQ is a preferential rate of duty that is applied to an in-quota quantity of imports. Once the imports exceed that specified quantity, a higher rate is applied. Canada maintains TRQs on the following dairy products: milk, cream, skim milk powder, butter and cream powder, industrial cheeses, milk powders, concentrated or condensed milk, yogurt and buttermilk.

• IATA forecasts a 4% increase in air cargo volume for 2023 year-over-year.

Europe Energy Updates

• Europe’s largest energy storage facility started operations in Wallonia, Belgium. The 40 lithium-ion mega-batteries enable stable energy distribution, even in cases of wind or solar input fluctuation. The center has the capacity to store 100 MWh of electricity and each battery lasts approximately 10 years.
• The EU approved of a German renewable energy scheme worth €28 billion in the hopes of utilizing wind and solar power, which is designed to produce 80% of Germany’s electricity from renewable sources by 2030.