Global Aperture

Product launch campaigns herald the fall quarter peak season and its usual trimmings: factory shutdowns and blanked sailings ex-China for the Golden Week holidays, demand spillovers into the air market, and terminal congestion.

Different are the new industry strategies to reach net-zero emissions: utilization of cargo sail boats, pulp carrier retrofitting for automotive transport, carbon-offset programs for air freight, and the premiere of alternative air cargo hubs may paint a different mural for fall quarter trade performance.

In light of softer second quarter earnings, some big box and apparel retailers have adjusted annual forecasts and slashed restocking orders, which may help to ease port congestion or at least avoid a string of labor actions in Europe and North America. Trade analysts suggest the global air market has flattened in past weeks, attributed to Asia-Pacific’s comparatively weaker recovery as well as Covid-19 related flight suspensions.

Americas

BNSF announces an end to its embargo of westbound shipments on September 4, citing success in reducing network congestion. The measure was launched on June 27 and extended in late-July to improve transit efficiency. More recently, the rail operator warns that intermodal cargo may experience transit delays between September 5-7, attributed to the US Labor Day holidays.

Local KWE sources report several that air cargo terminals in Atlanta (ATL) and New York (JFK) are mired in congestion due to staffing shortages, and may slow further with upcoming holiday travel. Canadian trade groups warn of a multi-modal bottlenecks throughout the country due to truck and warehousing shortages, reduced rail operations, and chart-topping airport delays in Vancouver, Toronto, and Montreal. In Mexico, torrential rains have flooded areas of Sonora State since August 19, disrupting ground handling operations to southerly gateways.

Asia-Pacific

Several cities in South China issued warnings ahead of Tropical Storm Ma-on’s landfall on August 25, forcing service delays and cancellations from several airlines, and disrupting port operations in Shenzhen and Nansha. In contrast, heavy droughts and high temperatures along the Yangtze River have stalled factory output and inland waterway feeder transit—both consequences of insufficient water levels for the region’s hydro-electric powerplants.

Europe, Middle East & Africa

An eight-day strike began at Felixstowe, the largest port in the UK, on August 22. The action is expected to drag on after union representatives confirmed that demands had not been met during preliminary negotiations. With strike dates at the Port of Liverpool indeterminate, carriers have begun rerouting ships for alternative UK gateways. In Germany, a court-imposed moratorium on industrial action at the ports of Hamburg, Bremerhaven, and Wilhelmshaven will expire on 26 August. This uncertainty threatens to further strain network capacity as Germany’s plan to prioritize energy production materials on its limited railways compounds congestion. Fortunately, the Rhine River’s water level is forecast to rise again after sections of it were closed last week, making it even easier for ships to navigate the river with a greater capacity to carry vital commodities.

Surging passenger demand and staffing issues still plague Europe’s air industry. Unionized pilots at Lufthansa could go on strike at any time according to union representatives on Thursday, as a dispute over pay continues. 26 flights were canceled out of London-Heathrow on August 23 due to staff shortages in air traffic control. In a move to limit disruptions, British Airways announced that it would cut approximately 10,000 short haul flights to and from the airport between late October and March. To mitigate overcrowding, UK officials approved plans to develop Kent's Manston Airport as an air cargo hub.

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