COVID-19 update: Impact on DACHSER’s operations in India
Due to the outbreak of second wave of Coronavirus, we would like to give you an update about the impact on DACHSER’s operations in India. The situation as of today, April 28, 2021, is as follow:
DACHSER branches in India
- Most branch offices across India are being kept closed as a precautionary measure due to the sudden rise of COVID cases. Our teams are working from home, with only skeletal staff at the offices and hence there are likely to be delays in responses due to the ongoing crisis.
- As a consequence of the lockdown, there are some operational impacts for air, sea, customs clearance and domestic trucking.
- Most countries have barred passenger traffic from India leading to no passenger carrying flights operating on International routes from/to India.
- This has created some additional constraint on already stressed space availability situation.
- Rates are bound to inch upwards for all sectors.
- Transit times too have increased as a consequence of capacity crunch.
- Sea freight was already facing the challenges due to the Suez Canal blockage end of March.
- Ports and terminals are functioning normally, but vessel schedules are impacted on account of the Suez Canal blockage as well as the sudden rise of COVID cases in India.
- Delays, roll overs are expected. Customers are advised to factor in delays of 1-2 weeks while planning their inventories.
- Expect more delays in communication or operations due to increasing COVID infections among staff at ports, customs, CFS and shipping lines.
- We do not have any unexpected disruptions in cargo movement in India, nor is any work stoppage expected at present.
- Customs clearance activities are functional at the movement.
- Customs is working with less manpower, no Customs Brokers is allowed to meet the customs officials, all processes is done faceless and things are moving in slow phase.
At DACHSER, we have undertaken significant measures to ensure our employees’ health and safety, at the same time continue to manage our day-to-day operations with minimal impact to our customers’ supply chains. Our teams are working diligently by all possible means in these testing times to assist and to overcome the challenges being faced.
Please rest assured that we will keep you updated of any changes to the current situation. hould you have any concerns and/or queries, please feel free to contact your local DACHSER representative in the region.
DACHSER Chem-Logistics | Chemicals in safe hands
The chemical industry is one of the most successful and competitive industries, supplying virtually all other sectors with crucial intermediate and end products as well as solutions. The prerequisites for this are high production standards, a comprehensive infrastructure, and a customized logistics with a clear focus on reliability, quality, and safety.
Air freight market update | April 2021
Air freight volumes continue to grow strongly, driven by the stabilization of world trade, which is further stimulated by large-scale economic recovery programs such as the one recently announced by the U.S. government.
To illustrate just one example with figures - Frankfurt Airport (FRA), Europe’s largest air cargo airport by volume, reported its most successful 1st quarter ever, with 553,600 air freight tons and a YOY increase of 23.7% (source: fraport). In addition, the tight ocean freight market is driving rapid growth in air freight tonnages.
The disruption of global supply chains due to capacity and equipment shortages has dramatically worsened with the blockade of the Suez Canal at the end of March.
- Ever Given – Impact on the air freight business
Four weeks ago, the container ship Ever Given blocked the Suez Canal for one week. During this time, a queue of about 450 container ships was formed to pass the canal. This incident also affects the development of the oil price with an increase by 6% m-o-m April. In addition, the already existing sea freight departure delays will be extended by further weeks.
This incident has implications for the entire global transportation market, especially for the air freight business. The already tight market for air freight capacity will become even tighter, including air charter capacities.
Transpacific air freight rates increased in early April, despite the impact of the Ever Given Suez Canal blockade. An analysis of the Baltic Exchange Air Freight Index (BAI) indicated a 20.5% increase in air freight rates from Hong Kong to North America. The severity of the impact of the Ever Given grounding is yet to be observed, while sea and air capacity will remain disrupted in the coming weeks.
- Supply & Demand Indexes and Oil Development
Please click the button below to read the latest Indexes on Supply & Demand and Oil Development
In case you need any additional information related to DACHSER’S air freight services and the current market development, please do not hesitate to contact your local DACHSER Air & Sea Logistics sales contact.
Sea freight market update | April 2021
The blockade of the Suez Canal has been lifted and the canal is freely passable again for some time. The backlog of waiting ships has almost been cleared. Carriers are partially stopping the booking freezes and accepting new bookings in some cases.
Despite this, the situation remains serious. It is expected that the consequences of the Suez Canal blockade will have a strong impact on the service schedules at least until June. Significant delays and congestion at the terminals are expected which could be followed by longer handling times.
Furthermore, all shipping companies are currently struggling with an ongoing severe shortage of available equipment. In view of the current situation, the availability of equipment will presumably be massively impaired until the end of June.
Trade Lane Update
North Europe Ports
- A critical congestion level has been reached in North Europe’s major ports as terminals are working on the backlog of vessels that were delayed during the Suez Canal closure.
- To reduce delays at ports, instead of completing a port rotation in Asia or Europe, carriers are considering unloading cargo at major hub ports and turning around early, so that ships arriving a week later can pick up the cargo and carry it to the destination port. This will cause delays in export cargo in Europe and Asia.
- Equipment Situation - Carriers are warning about short notice cancellations due to missing equipment.
Europe - Asia
- Eastbound vessels to Asia remain strongly booked until the mid/end of May. Short-notice bookings can hardly be placed, not even for an extra charge. Sea freight rates remain at a high level. Due to ongoing congestion at major hubs, such as Port Kelang (Malaysia) and Singapore, additional delays of up to 5 days have to be considered. Currently, all services to/from Karachi & Port Qasim (Pakistan) are delayed by approximately 4 to 6 days.
- Westbound, the already tight equipment situation is further exacerbated by the consequences of the Suez Canal blockade. All available sailings are completely booked. Even on premium services it is extremely difficult to place new bookings. Many carriers have little to no interest in new business as they are struggling with current volumes. Nearly all carriers have announced capacity cuts of up to 60% until further notice. Some carriers are no longer releasing equipment domestically and if they do, it is only for very high fees.
- -Blank sailings-
Mediterranean trade suffers the most in terms of blank sailings with around five services cancelled in the first week of May. In Northern Europe, about 1-2 services will be voided from the first week of May.
- -Blank sailings-
Multiple blank sailings were already announced by ocean carriers for Transpacific Eastbound and Far West Westbound starting from mid-April to mid-May, particularly due to the consequence of the Suez Canal blockade.
- -Port congestion-
North America West Coast continues to suffer from heavy congestion due to COVID-19 related impact on port productivity and increased demand. As of mid-April, there are already 30+ vessels queuing for berthing at Los Angeles/Long Beach, where longer lead-time on delivery is expected.
- Due to the above reasons, carriers could skip calls on short notice, especially for westbound, in order to catch up the overall service reliability.
- The situation will last at least until the end of May or even June. If it continues to stay like this, the ports and the USA will face further challenges due to the upcoming and historical PSS in August.
- Ocean carriers are also overwhelmed by the situation - late billings and releases are just the new normal.
- -Equipment shortage-
Container availability is already getting tight in early April, while the situation is expected to worsen and becomes critical from end of April to May/June. Ex Far East carriers have already implemented measures to restrict the equipment usage, in particular 40'HC, and prioritize the usage to Transpacific Westbound. Therefore, the equipment availability for the short sea or Asian trade will be affected.
- An obvious rate increase is expected due to the multiple factors mentioned above.
- As an alternative to the equipment shortage for full container shipments, DACHSER is offering its expedited LCL Service on the transpacific route. The weekly scheduled direct expedited LCL service from China to U.S. West coast brings average dwell time down from 14-25 days to 3-7 days.
- Equipment Imbalance Surcharges and Peak Season Surcharges are increasing. Additional allocation, if any, will only come against premium fees. Empty equipment is becoming tight rates are at an all-time high. All alliances are having large backlogs and can hardly cover existing business.
- Click the button below to read the current development on World Container Index and Shanghai Containerized Freight Index.
- Stay close with your logistics partner at DACHSER for up-to-date market information
- Provide accurate forecasts to secure equipment and space in time - the more reliable the volume is, the higher is the chance to get on board
- Place booking well in advance, we recommend to book at least 4 weeks in advance
- Inform your DACHSER contact about your priority shipments
- Be flexible with equipment, consider substitutions
- Reserve space on air freight services for shipments that cannot be delayed, the rates are slightly higher but it will keep your supply chain running.
If you would like to discuss your transport needs, please feel free to get in touch with your local DACHSER representative to work out the best logistics solution.
The women fighting the coronavirus
Right at the beginning of the corona pandemic, a distribution company based in northern Spain aligned itself with the new market requirements: in 2020, Pharmediq enlisted DACHSER’s help to transport more than 100 million masks and other protective equipment to locations in Spain and other European countries.
Seamless transport solution for Printed Circuit Boards shipping from Asia to Europe
DACHSER is providing a one-stop solution for printed circuit board (PCB) manufacturer CML. Holistic network and integrated systems are the backbone for the supply chain optimization.
DACHSER Morocco opens new warehouse in Tanger Med
Situated 14 kilometers from the shores of Europe, the Tanger Med port complex is the Mediterranean’s leading container port and a crucial component of Morocco’s ability to compete logistically. In response to growing demand among its customers, DACHSER Morocco has opened a new warehouse in this dynamic area.
A solid footing worldwide
Homes without any wood-based products from Austrian manufacturer Kaindl/Kronospan are few and far between. Achieving such widespread distribution poses quite the logistical challenge.
Current situation on Suez Canal
As already reported in the media, the container ship “Ever Given” has been freed over the last hours on the Suez Canal.
DACHSER organizes its first charter flight from Hong Kong to Porto
In response to an urgent request by a customer in Portugal, DACHSER Air & Sea Logistics organized a full air charter out of Hong Kong in a swift manner at the middle of the Chinese New Year, and successful carried out the entire transport process including last mile delivery in Porto via its own DACHSER European Logistics network.
Always on guard
At DACHSER, protecting data and systems is a top priority. Christian von Rützen, Department Head IT Strategy Implementation at DACHSER, explains the current and future challenges facing information security. He and his international IT security team have several areas of responsibility, including managing information security at DACHSER.
Air freight market update | March 2021
Current Challenges in Global Air Freight
- Major airports are still facing bottlenecks in cargo handling. Airlines have to reduce freighter capacities for urgent maintenance, while the market strives for additional capacities around the globe.
Congested Airport Situation
- At world's major airports, high freight volumes are currently seen. The reason is that more and more airlines are bundling flights at hub airports. The same applies to forwarders who are increasingly consolidating their activities.
- In addition, the number of passenger freighter so called ‘PREIGHTERs’ is increasing every week. For these flights, the loading and unloading process is much more time-consuming due to the sometimes loose packaging. This affects all ground handling (trucking, on-/offloading, palletizing) processes at large airports around the globe.
Global Capacity Situation
- The already mentioned global cargo situation and the continuing high demand for capacity have a significant impact on the yield of the major trade lanes, which is stable on a high level. Furthermore, access to capacity at adequate price levels is almost impossible.
- Necessary to allude here is that in the next few weeks a decline of freighter activities will become visible in the market, as many of the already obsolete aircrafts are in urgent need of a maintenance C or even D check. Inevitably, this will lead to less capacity in the market, higher demand and therefore higher costs.
- With the passenger freighters, the forwarders are trying to counteract this bottleneck. However, the number of available aircrafts has also reached its limits now.
Oil Price Development
- Another important topic is the development of the oil price. In the second quarter of 2020, the oil price was at a low of 17,54 USD, in February 2021, it is at 64,17 USD. The price has almost tripled. The high oil price has a direct impact on the fuel surcharges of the commercial airlines and, for example, also on the cost structure in the charter contracts of DACHSER’s dedicated flight activities.
- The cost structure is tied to the development of the global oil price. Therefore, the development of the global oil price becomes an everyday topic.
Read the PDF below for the current Global Capacity Situation and Oil Price Development.
In case you need any additional information related to DACHSER’S air freight services and the current market development, please do not hesitate and contact your local DACHSER contact.
Sea freight market update | March 2021
The post-Chinese New Year cool down that had been expected has not come to pass. In addition the continuing bottleneck of the North American western ports ties up shipping and equipment capacity enormously. Two weighty reasons stressing the sea freight market, impacting port activities and generating congestion across the global supply chain. Most experts expect this situation to last throughout the second quarter.
Trade Lane Update
Far East – Europe
- Westbound space and empty equipment availability (all types of containers) is still tight. After Chinese New Year there has not been a significant drop of cargo and carriers have been facing backlogs.
- On eastbound routes, space is getting limited due to blank sailings and the equipment situation remains tight. Carriers are implementing surcharges due to equipment imbalances.
- The space and equipment situation in Asia is extremely short and the complete transpacific eastbound trade is facing rollings and delays due to severe congestion along the U.S. West Coast.
- Official statistical data shows that less than 20% of the arrivals at the North American west coast ports have been on time since Los Angeles and Long Beach are facing handling problems. More than 60 vessels are anchored in front of the two ports, and more than 15 vessels in Oakland. Dockworkers are still operating with reduced staff due to COVID-19.
- This situation is expected to remain critical for at least the next 1-2 months.
- For the time being, DACHSER is still recommending long-term planning and asks customers for information about upcoming transports as early as possible so that we can offer the best solution e.g. alternative routings via Seattle / Houston or even via the U.S. East Coast.
DACHSER expedited LCL Service
- In addition, DACHSER offers an expedited LCL service from China to the U.S. West Coast which is a reliable alternative for customers to avoid congestion issues.
- The weekly scheduled direct expedited LCL service brings average dwell time down from 14-25 days to 3-7 days. Read more details about this DACHSER designed service.
- A strong increase on rates as per April 1 is hitting the market. Carriers are strictly managing space. Equipment availability remains tight and waiting time for vessel space is about 6 weeks.
- At Savannah port, some vessels are anchoring for unloading as well. The delay is currently almost 4 days.
- The yard is extremely congested and the port continues to move imports to the ocean terminal to make room for incoming imports in the pads.
- Carrier contingency programs will also have a significant impact on delays and vessel space shortages from Europe to the U.S. and Mexico, as reduced and suspended services are expected in the upcoming weeks.
Read the PDF below for the current development based on World Container Index and Shanghai Containerized Freight Index.
Please do not hesitate to contact your local DACHSER representative for further advice, possible alternatives and any further information that might be needed.
Striking a balance between stability and change
In January, a new generation took the helm at DACHSER.
The new DACHSER magazine is here!
The baton has been passed: the next generation of DACHSER management, led by CEO Burkhard Eling, officially took the helm on January 1 of this year. In the latest issue of the DACHSER magazine, we’ve taken a moment to reflect on this transition at the top.
A crane for Southeast Asia
DACHSER Air & Sea Logistics aided efforts to repair a crane in Indonesia by organizing the tour of a steel jib from Düsseldorf to Jakarta. Measuring 23 meters in length and 3.6 meters in width, the jib spent most of its 55-day trip on board a ship.