October 14, 2022

Al Sharqi July 2022 Ocean and Air Market Updates

Monthly Ocean and Air Freight Market Updates July 2022

The month of June and its preceding month has been eventful, with global political activities and crisis which has had their toll on general market products and services. On the European route is the Ukraine-Russia conflict which has reduced consumer purchasing power. The view on Asia is more of a natural outbreak of the Covid-19 virus resulting in major city lockdown. These factors have influenced the market significantly with several deficiencies in productivity, carrier capacity, and port management. Inflationary pressure never failed to contribute to its quota.

These issues are looking to subside, and the forces of demand are expected to push up across different trade routes with the Middle East and the world.

Outbound Ocean Market Update United Arab Emirates

Key
++	Strong Increase
+	Moderate Increase
=	No Change
–	Moderate Decline
—	Strong Decline

ME-North America

One Line Status: There is a high chance for an increase in export volume to North America. This possible increase is due to the positive consumer demand in the US. The increase in demand (+) is predicted for mid-July.
Local Rates: The predicted push in demand in North America points to a possible moderate increase in rates. However, rates are currently mild.
Local Space: Limited (-)

Local Capacity/Equipment: Limited. Capacity loss and delay in return sailings are triggered by port congestion in North America.

Note: Proactive action is required- reservation should be made 2-4 weeks before the expected date of departure(ETD)

ME-Europe

One Line Status: The Russia-Ukraine conflict has distorted the positive state of the European market. The effects of the conflict are seen in the downturn in consumer demand and spending (-). However, a moderate increase(+) in demand is expected from July to August
Local Rates: Rates remains unchanged

Local Capacity/Equipment: Available

Note: Reservation must be made 3 weeks ahead of time to avoid unforeseen capacity changes

ME-Africa

One Line Status: A recovery in demand in South Africa and stable demand in West and East Africa sums up a good market in Africa.
Local Rate: There is no significant change

Local Space: Limited(-)

Local Capacity/Equipment: Available (-)

Note: Book 2-3 weeks ahead of time to lock down space against a rise in demand

ME- Mediterranean

One Line Status: A high level of activities is predicted in July. The demand is stable (=), and port congestion is gradually resolved (-).
Local Rate: Rate remains unchanged

Local Space: Open

Local Capacity/Equipment: Available, but advance booking is advised.

Note: Reservation should be made well ahead of time- 2-4 weeks before.

ME- Asia

One Line Status: Local spaces are expected to be limited due to strong demand. The export of luxury goods to Pakistan has been banned, and energy shortfall is still an issue in Sri Lanka.
Local Rate: Possible increase in rates(+) due to export constraints and port situations

Local Space: Very limited

Local Capacity/Equipment: Limited, due to the strong demand

Note: Book 2-4 weeks to secure space, equipment, and carrier

ME- China

One Line Status: Production and business operations in China are gradually picking up due to the suspended city-wide lockdown. A gradual resolution of port congestion and delayed sailings are expected between July and August.
Local Rate: Rates may increase (+)

Local Space: Tight

Local Capacity/Equipment: Limited

Note: Reservations should be made 4 weeks ahead of time.

ME- Oceanic

One Line Status: Vessel sliding and port omission are likely to occur in July. This is due to the strong level of demand.
Local Rate: Rates may increase (+)

Local Space: Open

Local Capacity/Equipment: Available

Note: Booking 2 weeks before the expected departure date is best despite the availability

ME- Latin America

One Line Status: Activities of the previous month display much-improved demand, which is expected to continue in July.

Local Rate: Currently unchanged

Local Space: Relatively open

Local Capacity/Equipment: Limited

Note: Early booking should be made- 2-4 weeks ahead of time

Inbound Ocean Market Update United Arab Emirates

North America

One Line Status: The North American ports are heavily congested, leading to significant port waiting times and immense capacity loss. The highest waiting time is at port Vancouver with 35 days, and the minimum which port Seattle with 2 days.
Local Rates: Possible moderate increase(+)

Local Space: Tight

Local Capacity/Equipment: with a recorded 50% berth dwelling time, capacity and equipment are low.

Note: Reservations should be made 4 weeks ahead of time.

Asia Pacific

One Line Status: The Asian region has been severely affected by the Covid-19 pandemic. Cases in major cities –Beijing, Tianjin, and Shanghai, resulted in lockdown, which took its toll on the market. Freight operation is to gradually picked up pace since the suspension of the lockdown.
Local Rates: Rates may increase as activities look to recover

Local Space: Tight

Local Capacity/Equipment: There is a capacity shortage, extended waiting times, and port congestion.

Note: Bookings should be made 4 weeks ahead of time

Europe

One Line Status: On the positive side of things, demand is stable across the European market. On the other hand, congestions and lengthy cargo waiting times remain an issue. Rotterdam and Bremerhaven ports are seriously congested.
Local Rates: Unchanged

Local Space: Tight

Local Capacity/Equipment: Limited

Note: Reservations should be made 4 weeks ahead of time

Latin America

One Line Status: The pull of reservations has been significant; as such, there is full capacity utilization. Cargoes are full, and may result in cargo rolling.
Local Rates: Unchanged

Local Space: Limited

Local Capacity/Equipment: Limited

Note: Reservations should be made 2-3 weeks ahead of time

Air Freight Market Update for the United Arab Emirates

Air Freight Demand: The air freight demand is on the high side. This is owing to the outstanding performance and surge in e-commerce. The current most preferred business model demands faster and more frequent delivery. As a result, shippers have turned attention to air freight as an alternative to the alarming port congestions on different routes.

Carrier Capacity: A radical surge in demand takes its toll on carrier capacity. Air space closure has also played a part, as evident in Europe(Ukraine-Russia conflict). On a different lookout, carrier capacity is still at a loss in China due to the just-ended lockdown.

Local Rates: An increase is expected. Factors such as war surcharges, increased fuel prices, and other key factors have triggered higher rates. The increased rate is expected to last for a while.

Middle East and Air Carriers ME

The pandemic season never had it easy on air freight, so it’s still on course to full recovery in the post-pandemic era. Cargo volume continues to enjoy a consistent improvement in the course of the year. A minimum increase of 7.2% has been registered compared to the previous year. Demands are expected to rise on several routes, which will, in turn, push the demand on Air Freight carriers as an alternative to the disturbing port congestion across several regions.

Terminals are functioning, and a little capacity reduction is possible.

Asia

The Asian market has been void of good productivity due o the lockdown in Shanghai. The lockdown has been eased, and production has begun to build momentum. Massive productivity is predicted for July-August. Cargo volume is recovering and expected to shoot up more, but capacity may experience a few constraints. Rates have also increased across the Asian route.

Europe

There is a stable level of demand, and capacity has experienced a reasonable improvement. Rates are reducing, but a shoot in jet fuel price may influence the fuel surcharge in July. Booking to uplift window is approximately 5 to 10 days, but early booking is recommended.

North America and South America

Stable demand and capacity have been the order in America. Dwell times have been significantly reduced, and rates have remained unchanged. However, fuel price continues to fluctuate.

United Arab Emirates Freight Local Updates, July 2022

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Factory Output News July 2022

Middle East

The Middle East continue to experience a positive PMI trend in 2022. The records of May 2022 made it a complete 5months of the most significant increase. Foreign and domestic demand has been doing well, not forgetting the increased level of output and employment. Buying levels reduced, output charges reduced, while input cost inflation increased. Source- Markit Economics

Asia

Asia suffers a significant PMI dip in the previous months. This is due to the lockdown in Shanghai and other cities in China, which have crippled productivity. Japan, Malaysia, and Taiwan were also affected in connection to China and inflation issues. Demand has been significantly put on hold, and the supply chain has struggled in the previous month. But the end of the lockdown kickstarts production activities and pushes Asian productivity to a positive curve.

Europe

Manufacturing PMI in Europe dropped from 54.6 in May to 52.1 in June. It has never been this poor in the last two years. A major decline in exports and intake orders was recorded owing to increased activity on unfilled orders. The Ukraine- Russia conflict played a significant role in the unhealthy PMI in Europe during this period. Source- Markit Economics

America

A little push in the PMI was experienced in June. However, remains the slowest growth experienced since July 2020. Several supply chain disruptions and more focus on the utilization of current inputs for production. Inflationary pressures, rise in employment, and reduction in new orders all sum up American productivity.