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Aperture & Focus 2024: Week 32
Aug. 7, 2024
Aperture & Focus
Global Aperture
The International Air Transport Association (IATA) reports consecutive double-digit growth in air cargo capacity from December 2023 to May 2024, and early reports indicate continued growth in June 2024. The expansion of airline fleets and increased utilization, especially in the Asia-Pacific region, have been key driving forces. However, cargo load factors have not fully recovered to pre-COVID levels.
Chinese general cargo ships have begun using the Arctic Northern Sea Route (NSR) as an alternative to the Red Sea, assisted by icebreakers during summer months. Scientists predict that climate change will soon allow year-round use of this route, significantly reducing the distance between China and Northern Europe, though vessels will need “ice-strengthened hulls” for safe passage.
Global ports are still facing significant congestion due to the Red Sea crisis and an increase in shipping volumes, causing extensive dwell times and operational challenges. There are noticeable delays in Durban, Ningbo-Zhoushan, Vancouver, Los Angeles, and Chittagong due to increased vessel utilization as shippers front-load their shipments to avoid potential disruptions as peak season arrives.
Regional Focus
Americas
United States: Tropical Storm Debby, which struck Florida on August 5th as a Category 1 hurricane, has led to severe flooding and port closures in Florida and Georgia, widespread power outages, and flight cancellations. This has disrupted cargo operations at major ports such as Jacksonville. Although the storm temporarily disrupted Port Tampa Bay's waterside operations, landside facilities remained operational throughout, and the port has since fully reopened.
The Port of Virginia’s newly expanded central rail yard is now fully operational as of August 6th, boosting the port’s rail capacity. This project strengthens the port's infrastructure and includes new rail tracks and electric cranes.
The International Longshoremen’s Association (ILA) is still preparing for a possible strike on October 1st, as it approaches the expiration of its current contract. Negotiations with the United States Maritime Alliance (USMX), who represent employers of the East and Gulf Coast longshore industry, have been delayed, and the ILA is planning to instruct its members on strike strategies while seeking significant wage increases and opposing port automation efforts.
In June, Port of New Orleans and New Orleans Public Belt Railroad (NOPB) reported double-digit growth in intermodal rail volumes. NOPB is making significant strides in enhancing its infrastructure with two major projects: the Transloading Industrial Park and the Claiborne Yard expansion. The expansion is expected to accommodate increased rail volumes, create new markets, and bolster regional economic growth.
Mexico: Cargo rail thefts surged dramatically, with 307 incidents reported in May 2024. The most frequently stolen items include cement, auto parts, and industrial products, with significant thefts occurring in Guanajuato, Coahuila, and Aguascalientes.
Panama: The Panama Canal has launched a new Long-Term Slot Allocation (LoTSA) method for large vessels, providing more predictable and stable scheduling for canal transits. This new system allows clients to secure multiple transit slots in advance through an auction process starting September 2nd.
Asia-Pacific
Bangladesh: The resignation of the Prime Minister on August 5th and subsequent political unrest has severely disrupted the supply chain sector. There is a substantial backlog of cargo at Dhaka airport and Chittagong Port. The clearance rate of cargo at each of these locations has plummeted due to ongoing protests, enforcement of curfews, and closure of all factories and commercial operations.
Hong Kong: Hong Kong International Airport has introduced a specialized storage zone for lithium batteries at one of its air cargo terminals. The upgraded facility includes better fire-fighting accessibility and automated storage adjustments to manage battery cargo effectively and mitigate potential fire risks.
Europe, Middle East & Africa
Germany: Cargo operations were temporarily suspended at Leipzig/ Halle Airport when environmental activists blocked runways in protest of the German government’s continued use of fossil fuels. The protest disrupted night cargo flights during the early morning of August 1st and suspended cargo movement for three hours.