AlwaysFree: UPS Freight and Logistics News and Market Update - Week of November 17, 2022

According to the company’s website article published on November 17, 2022

Top Takeaways

• Air Canada, WestJet and Air Transat have resumed flights to Puerto Rico for the 2022/2023 winter season, increasing more cargo capacity between North and South America.
• China has announced less strict travel restrictions as travelers now will only have to provide a negative Covid-19 test to be allowed in as well as reducing the required quarantine period. Flights are expected to increase as a result of this announcement.
• A final regulation on food traceability has been released by the US Food and Drug Administration (FDA) to speed up the identification and prompt recall of potentially contaminated foods, thereby reducing the incidence of foodborne illnesses and/or fatalities. This rule may affect importers of the foods appearing in FDA's Food Traceability List.
• With the Open Skies agreement between India and Canada, the 35-weekly flight cap will end, and the two countries will have service access to unlimited flights between key cities, including Delhi, Mumbai, Bangalore, Toronto, Montreal, and Vancouver. Cargo belly capacity will increase gradually.

North America

Air

• Colorado Springs is set to be a hotspot for air cargo operations as investors show interest in cheaper operating costs and less congestion compared to major hub airports.

Ocean

• West coast ports registered a decline in cargo volumes. The total throughput of Port Los Angeles had a 25% decrease year-over-year in October, and The Port of Long Beach had a similar decrease in October, showing a 24% decrease year-over-year.

Latin America

Air

• British Airways resumes direct flights to Costa Rica and will be holding three flights per week from London, UK to San Juan, CR, increasing cargo capacity between the two regions.
• Air Canada, WestJet and Air Transat have resumed flights to Puerto Rico for the 2022/2023 winter season, increasing more cargo capacity between North and South America.

Ocean

• The Brazilian Minister of Infrastructure, Marcelo Sampaio announced that the Port of Santos will lease out two more terminals, as a result of the privatization of the port.

Asia-Pacific

Air

• China has announced less strict travel restrictions as travelers now will only have to provide a negative Covid-19 test to be allowed in as well as reducing the required quarantine period. Flights are expected to increase as a result of this announcement.
• Korean Air announced the resumption of its flights to China, Japan, and Israel following its pause due to the recent Covid-19 outbreak and demand challenges.

Ocean

• The Australian ports are facing a potential standstill as Svitzer, the nation's largest tugboat operator, gave notice of a lockout of its crew on Friday, November 18, in response to a three-year pay dispute. Svitzer controls all the tugboats which move the cargo ships into position when docking or departing.
• As of November 14, carriers have reported 53 blank sailings for the Transpacific Eastbound trade lane for the month, reducing 26.1% from normal capacity. For December, carriers have announced 30 blank sailing for Transpacific Eastbound trade lane.

Europe

Air

• Starting on November 20, British Airways will launch its first official Airbus A350 alongside its Boeing 777-200ERs with two daily flights from London Heathrow Airport to Cape Town, South Africa. Increased cargo capacity between the two regions is expected.

Ocean

• In the first nine months of 2022 the Port of Hamburg showed a decline of 2.7% in the import and export rates, a decline of 7.4% in the number of container vessels and a 4.3% decline in seaborne cargo compared to 2021. The CEO of the port, Axel Mattern, stated that the declines were due to the Europe geopolitical tensions, inflation, and global supply chain disruptions

India, the Middle East, and Africa

Air

• Etihad Airways is expanding its partnership with Garuda Indonesia to double their combined destinations across locations, including the Indonesian archipelago, Southeast Asia, Middle East, the US, and Europe. Cargo, maintenance, repair, and overhaul are also other services the carriers are considering collaborating on.
• After four years of utilization, Emirates will swap the A380 aircraft with the 777-300ER aircraft for the two weekly flights from Dubai, UAE to Hamburg, Germany through the summer of 2023. With the 777-300ER's higher freight capacity, an increase in cargo is expected.
• With the Open Skies agreement between India and Canada, the 35-weekly flight cap will end, and the two countries will have service access to unlimited flights between key cities, including Delhi, Mumbai, Bangalore, Toronto, Montreal, and Vancouver. Cargo belly capacity will increase gradually.

Ocean

• Container throughput in Saudi Arabia ports grew by 15.3% during October year-over-year. Exported containers in Saudi Arabia ports grew by 17.75% year-over-year, while imported containers also increased by 23% and transhipments by 8.5%.

Customs and Brokerage

• A final regulation on food traceability has been released by the US Food and Drug Administration (FDA) to speed up the identification and prompt recall of potentially contaminated foods, thereby reducing the incidence of foodborne illnesses and/or fatalities. This rule may affect importers of the foods appearing in FDA's Food Traceability List.
• The Green Shipping Challenge, which encourages governments, ports, and businesses to prepare commitments to stimulate the transition to green shipping, was launched this week. As part of this endeavor, more than 40 key announcements were made during the recent 2022 United Nations Climate Change Conference, addressing innovations for ships, expansion in low- or zero-emission fuels, and regulations to help boost the uptake of next-generation vessels.

Supply Chain & Market News

EU Energy Price Updates:

• Although the European Commission agreed on a temporary price cap in October, they are still considering its potential risks:
• While 15 countries, including France, are demanding the cap, others including Germany and the Commission remain opponents due to risks of increased gas consumption or discouraging suppliers. The Commission will propose an outline for a temporary gas price cap until November 24, when the next discussion is scheduled. If the gas cap remains elusive, it will be rediscussed at the next European Summit on December 15 and 16.
• Despite Germany's opposition to the EU solidarity price cap, the government is planning to cap the prices starting January 1, 2023, for industrial consumers in Germany:
• €0.13 per kilowatt-hour (kWh) applied for 70% of the previous year's consumption for electricity
• €0.07 per kWh applied to 70% of the previous year's basic consumption for gas, until the end of April 2024

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