Global Market Update – May 1, 2020

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Country-Specific Updates:

China: DSV Offices and warehouses will be closed during Labour Holiday, May 1 to May 5.
South Africa: Starting May 1, the South Africa curfew will be eased to 8:00pm – 5:00am and some industries are expected to reopen with restrictions.
India: Lockdown is expected to end on May 3 but it could potentially be extended (not yet confirmed).

Airfreight Highlights

In China, the current market remains very critical. Thousands of tons of cargo entered China’s terminals before the holiday, which has caused lack of space out of China, leading to the highest per kilo rate ever. Exploring SEA-AIR solutions via Korea, Taiwan, and Singapore is recommended. China’s outbound cargo capacity is now 6% higher than last year, but all cargo is booked, and we are seeing unprecedented rates.

Global air cargo capacity is 29% lower than last year, which is the same decline as last week. Transpacific cargo capacity is ~5% lower than last year, while Transatlantic cargo capacity is over 50% lower.

Global widebody belly capacity increased 23% since last week, mainly driven by “passenger freighter” flights. Freighter capacity has increased consistently over the past months.

Cargo capacity out of Asia Pacific is now back at 78% of 2019 levels, even though Asia Pacific saw the largest decline in passenger capacity. This was partially compensated for by strong freighter capacity growth. The total increase of freighter capacity out of Asia Pacific equals around 125 daily B777F flights.

Freighter capacity: China, South Korea, USA, and Russia account for ~50% of global freighter capacity growth. Freighter capacity from South Asian markets such as India and Bangladesh is strongly reduced.

Belly capacity: Capacity at large global cargo hubs is recovering due to passenger freighters. PVG saw a strong uptick in widebody belly capacity, driven by demand for Personal Protective Equipment (PPE). Widebody belly capacity at other airports started to increase in April.

Ocean freight highlights:

Panama and Suez are offering incentives to keep ships transiting. The Suez Canal Authorities are now “striking back” against the competition from low oil prices.

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