With summer officially arriving this past weekend to mark the start of the traditional “peak season”, we wanted to take the opportunity to provide you with an update on our operational status, as well as a market update of current rates and conditions.
We remain fully operational and open for business. Most of our staff continues to work remotely and we are still providing a full range of air, ocean and ground solutions, both domestically and worldwide.
I am also proud to report that we have retained 100% of our team members and that we are well prepared to support our customers and shipping partners worldwide as businesses continue to reopen.
Rates continue to remain elevated and very volatile in many markets, especially for air freight. A quick update of specific market conditions for air, ocean and grounds service is as follows:
- China/Asia: Demand is slowly returning to a more normal level, and the most recently updated rates have started to come down as well, though they are still at 200-300% of normal in many markets. Nonetheless, rates are well off their historical highs reached in April/May. Capacity remains very tight, due to the ongoing grounding of nearly all international passenger flights. Backlogs exist in many key gateways, including Shanghai, Hong Kong, Shenzhen and elsewhere. The impact of renewed quarantines remains to be seen and tariff headwinds, though off the front pages, still remain.
- Europe: Airlines are gradually adding capacity to ease the backlogs seen 60 days ago, with limited flights to/from the US resuming slowly. Rates remain well above their historical averages but continue to trend downward.
- Middle East: Key transit hubs in the Middle East (especially Doha and Dubai), remain very congested due to the combination of COVID-19 capacity constraints and high demand. Rates have moderated slightly but remain well above historical averages.
- Americas: Domestically, capacity is slowly increasing as passenger flights are added. However, there is a severe shortage of widebody flights, which limits the industry’s ability to accommodate palletized and oversized cargo. Transit to/from Mexico, Central and South America from the USA continues to remain very challenging, with flight options very limited. Pricing has moderated and is near normal, domestically.
- Imports – Asia to U.S.: Rates are running slightly ahead of last year, with a General Rate Increase (GRI) recently implemented by most carriers on June 15th. An additional GRI is expected on July 1st. Space is very tight from all points, due to reduced sailings. You should book 10-14 days in advance.
- Imports – Europe/Middle East to U.S.: Rates remain soft and have begun to decrease in many markets. They are at or below last summer’s rate at this point. There are no GRI’s in place at this time and none are expected for July.
- Exports – U.S. to Asia: Rates remain steady and little changed over the past 6 months. No GRI’s anticipated at this time. Capacity remains very tight, due to reduced sailings. You should book 10-14 days in advance.
- Exports – U.S. to Europe/Middle East: Rates remain steady and little changed over the past 6 months. No GRI’s anticipated at this time. Capacity remains very tight, due to reduced sailings. You should book 10-14 days in advance.
- Full-Truckload (FTL): Full-truckload freight in the USA remains very challenging nationwide, but especially on the U.S. West Coast. Rates have now surpassed pre-pandemic levels in many lanes. The combination of seasonal demand for produce, reduced drivers on the road and a spiking demand by retailers to re-stock shelves, has driven up rates quickly. Trucks remain in short supply, with available loads in some markets outnumbering available trucks by 10:1.
- Less-than-Truckload (LTL): Less-than-Truckload (LTL) shipments are moving normally with minimal impacts on service or pricing at this time.
- Demand for aircraft charters has diminished greatly, as there is now enough Personal Protective Equipment (PPE) on the water that emergency supplies via air freight are not necessary. FEMA recently discontinued their use of charters as well, reducing demand further and freeing up aircraft.
We hope you find this update useful in making future shipping plans. Our team is here to support you and your business as we all work together to overcome the COVID-19 challenge. Please let us know how we can help. You can contact our customer service team at: firstname.lastname@example.org or www.airandsurface.com