Market Updates (Oct 12 - Oct 19)

Navi Mumbai International Airport welcomes first aircraft

In a landmark moment for the Navi Mumbai International Airport (NMIA; Airport Code: NMI), an Indian Air Force (IAF) aircraft successfully touched down on its South runway. The inaugural landing of the IAF C-295, a large multi-role tactical airlifter, represents a significant milestone in the Adani Group’s development of the greenfield international airport, which started in August 2021, during the pandemic and is scheduled to be operational in early 2025.

Truck freight rates hold steady in September amid pre-festival demand

On the Delhi-Mumbai-Delhi route, truck rentals for an 18-ton payload truck increased slightly by 0.7 per cent, reaching ?1,53,000 compared to ?152,000 in August. Similarly, the Mumbai-Chennai-Mumbai route experienced a 0.7 per cent rise, with rates climbing to ?151,000. The Delhi-Kolkata-Delhi route maintained its rate at ?150,000, while the Bengaluru-Mumbai-Bengaluru route saw a 1.6 per cent increase, bringing the rate to ?127,000.

Qatar Airways Cargo and Qatar Post Sign Strategic Cooperation Agreement

Qatar Airways Cargo and Qatar Postal Services Company has signed a cooperation agreement, demonstrating a shared commitment towards enhancing their strategic partnership in postal activities and mail transportation to and from Doha. The agreement aims to efficiently meet customer needs in accordance with international postal union standards, and reflects the ongoing efforts of both parties to enhance logistical infrastructure, ensuring smooth and effective coordination in the transportation and delivery of postal shipments. It also covers competitive rates specifically designed for postal shipments transported by Qatar Airways Cargo to Qatar Post, the national provider of postal services in Qatar.

Cabinet gives green light to Coastal Shipping Bill, 2024

The bill proposes to do away with the requirement of trading licenses for Indian flag vessels for coastal trade. Regulation for international trade ships is also expected to be aligned to global standards.

The Bill also proposes to integrate coastal maritime transport with inland waterways. The Centre aims to create a conducive environment to reduce transportation costs and, at the same time, encourage competition in the sector. Steps could also be put in place for Indian vessels to increase their share in coastal shipping.

Regional Container Lines expands India service with MV Hemma Bhum inaugural voyage

Regional Container Lines (RCL) has taken a significant step to enhance its India service by deploying the 7,000 TEU vessel, MV Hemma Bhum, to its RWA2 service. This vessel made its inaugural call at the PSA BMCT terminal in Nhava Sheva and the Adani Container Terminal in Mundra during the last week of September 2024, marking a milestone in RCL’s operations.

The RWA2 service is pivotal for the China-India trade route and is operated in collaboration with various stakeholders, with RCL serving as the lead partner. This service connects critical ports, including Shanghai, Ningbo, Shekou, Singapore, Port Klang, Nhava Sheva, and Mundra.

Xeneta and eeSea unite to enhance shipping insights with pro-forma transit times

By incorporating port-to-port transit times within Xeneta’s platform, users will gain access to vital scheduling intel that connects transit times with fluctuations in freight rates. This integration aims to enhance visibility into the dynamics between pro forma transit times and ocean freight rates, allowing stakeholders to make more informed decisions.

Key benefits of this collaboration include:

– Introduction of Port-to-Port Transit Times: Users will now have access to essential transit time data directly within Xeneta’s platform, facilitating better logistical planning.?

– Pro Forma Transit Times at Port Pair/Carrier Level: This feature enables users to evaluate transit times based on specific port pairs and carriers, improving decision-making processes.?

– Enhanced Visibility: The partnership aims to provide clearer insights into how pro forma transit times influence ocean freight rates.?

– Improved Accuracy: With better data, shippers can predict transit times more accurately and understand their impact on freight costs.

Shippers told to delay air cargo tenders until after peak season turmoil

Air cargo shippers have been told they should delay their 2025 tenders until after what is expected to be a tumultuous peak season.

In a series of recommendations on how to manage current market conditions, Xeneta chief airfreight officer Niall van de Wouw said companies should make sure terms and conditions (T&Cs) are firmed up, avoid air hubs sensitive to the e-commerce boom, take advantage of the lack of backhaul demand, utilise data and delay tenders to avoid the upcoming peak season.

Etihad Cargo looks to benefit from passenger network expansion

Etihad Cargo is hoping to benefit from an expansion of the airline’s passenger network in the coming winter season. From November, the carrier is planning to increase its passenger network to more than 900 flights per week. This includes increased belly capacity to existing destinations across South Asia, Southeast Asia, Europe, the Americas, the Middle East, and the Levant, as well as four flights to a new passenger destination, Nairobi. In Europe, the carrier will add 36 weekly flights, with destinations including Frankfurt, Paris, Rome and Milan moving to double-daily services. Additional flights will also boost capacity in Zurich, Manchester, and Düsseldorf.

Freight rates will stay high next year – no respite for shippers predicts Drewry

As the prospect of more US East Coast port strikes remains uncertain, the maritime consultancy drew up scenarios with a strike in January and without one and found that in both models, freight rates would continue to rise. A reopened Red Sea would increase shipping capacity by about 25%. But Drewry does not expect this to happen; rather, the disruption and Cape of Good Hope routing will continue until at least 2026.

Uplift for Hong Kong's air cargo hub status, while container port declines

the focus on air has come at the expense of Hong Kong’s port, which is in chronic decline after focus switched to mainland Chinese ports. Indeed, last year Hong Kong fell out of the world’s top 10 container ports for the first time in the history of container shipping. Last year, the port saw volumes fall 14.1%, to 14.3m teu? – 20 years ago it regularly vied with Singapore and Shanghai ports for the title of the world’s busiest. However Hong Kong is using its maritime expertise to ensure connectivity with mainland ports via innovative Pearl River Delta barge services.

Congestion fears as box lines plan to dodge EU carbon tax with UK first-call

The UK appears to have become the hot EU ETS-dodging destination du jour, with many carriers adding a call there before going on to EU ports on Asia-Europe routes.? While the UK has its own emissions trading system (ETS), shipping will only be included from 2026 – and even then, only voyages that depart from and arrive at UK ports. This means shipping lines that would be paying a 50% EU ETS levy on a voyage from Asia to Europe, had they called first at an EU port, would only need to pay the 50% on the hop from Britain to Europe.

Liner industry frustration as India demands millions in taxes

The issue has significant repercussions for the liner industry. Last year, all major? box ship operators on Indian trades, received a government notice over their alleged failure to fulfil their obligations under India’s Goods and Services Tax (GST), a unified tax law implemented in 2017. At the centre of the debate is the so-called “arm’s-length” relationship between a foreign entity and its local frontline office.? But this concept or principle, under which international organisations are typically taxed only on earnings in the country of origin, has had its share of ambiguity and controversy. And governments worldwide have treated these transactions in different ways. The CSLA submitted the industry view that there was “no supply” of goods or services involved to attract provisions of the GST framework. The group also argued that local carrier offices were merely acting as agents or frontline offices for the foreign entities.

Delhi taking the lions share of India's new air cargo capacity

Increased demand for airfreight out of India has seen global capacity from the subcontinent rise 7% this year so far – but it’s a tale of two airports - Delhi and Mumbai, with Delhi taking on the bulk of the extra supply. As a result, Delhi Airport is becoming congested, according to local forwarders. capacity out of Delhi to North America was up 10.5%, while Mumbai was up just 2.6%. Last month, capacity out of Mumbai was more than 11% below last year. To the EU, Delhi's capacity went up 9.4%, but just 1.6% in Mumbai in the year so far. Last month, Mumbai’s capacity fell nearly 12% over 2023, while Delhi’s surged more than 19%. And Delhi is beginning to capture new transhipment traffic, such as cargo out of Bangladesh.

Air cargo market enjoys some calm before an expected Q4 storm

It has been a quiet couple of weeks in airfreight, owing to China’s Golden Week. Overall rates have edged lower, although are starting to rise again; some European freighter airlines cut capacity to China significantly over the holiday, but that is expected to change. In North America, shippers had prepared for the east and Gulf coast port strikes by ensuring goods were already in place – discounting the need for emergency airfreighted shipments.

Despite the anticipated lack of emergency airfreight, industry executives believe the fourth quarter will still be strong, as the likes of Shein and Temu gear up for the Christmas season, while industrial traffic also tends to pick up in Q4.

Air cargo spot rates hit 2024 peak, while Vietnam becomes a hotspot

Air cargo spot rates have risen to their highest level this year, despite the recent Golden Week holiday in China. Tonnages fell by 7% week on week out of Asia Pacific, in the week to 6 October, WorldACD said. But worldwide spot rates went up +1% in the week to $2.84 per kg – their highest level this year. Asia Pacific rates rose 1%, while Africa was up 2% and Central and South America up 5%. WorldACD noted that contract rates out of Asia Pacific rose 2%. One current hotspot is Vietnam – and it has not gone unnoticed by carriers. Capacity out of Ho Chi Minh to North America last week saw 359% growth, year on year, according to Rotates capacity database, and last month the tradelane saw 86% growth on the year.

Spot rates ex-Asia still falling, despite USEC congestion, with more blanks

Container spot freight rates on the main trades out of Asia continued to fall this week, as the resumption of operations at US east and Gulf coast ports eased industry congestion fears. Nonetheless, the three-day stoppage by ILA members ensnared up to 70 vessels in the region, leaving an inevitable backlog that will take time to clear – estimates vary from “a matter of days” to “two or three weeks”, although it seems pretty clear that it is unlikely to have an effect on rates.

According to Drewry’s World Container Index (WCI), spot rates on the Shanghai-New York leg were down 3% week on week, to $5,761 per 40ft, while its Shanghai-Los Angeles was down 5% week on week, to $5,071 per 40ft. The Xeneta XSI transpacific route similarly declined 2.5% to $5,489 per 40ft.