Rail Archives | Metro Global

Freight market report – December 2021

Dec 16, 2021 | Air, Rail, Sea, Sea/Air, Supply Chain

With supply chains battling through overwhelmed transport systems, material shortages, and infrastructure disruptions for close on two years, we asked our partners in seven key markets to share their thoughts on critical operational elements, including demand, capacity and rates.

AIR

In most regions airports are operating normally, or are improving, though there is uncertainty about the impact of Omicron and there are backlogs and operational challenges at Indian hubs.

Shanghai is a notable exception, with strict quarantine regulations in place for ground handling since September, restricting number of flights flown and the airport’s operational capability, which has been massively exacerbated by a PPE and test-kit peak lasting till early November.

Continuing congestion at key European and US gateways are highlighted as a particular issue by the origins and in the UK there is limited handling capacity in BHX, GLA, NCL, LHR and MAN, though clearances are being done on time.

While no new capacity has been added, most origins noted the resumption of passenger flights, but the return of belly-hold space for passenger luggage has been at the expense of cargo capacity.

Freighters are operating from all origins, but at many they are ‘Preighter’ conversions and from China - and particularly Shanghai - are almost exclusively committed to eCommerce and rapid-test kit cargo.

Perhaps unsurprisingly rates ex Shanghai are soaring, with increases of 10-15% in the last week.

Rates from Sri Lanka have softened, but are expected to harden, bringing them into line with every other major trade route.

SEA / AIR

It is worth highlighting the situation at Dubai, where airports are operating to 90% capacity, with efficient handling and no delays.

The air freight market is particularly buoyant, with no sign of the peak season slowing and multiple carriers serving airports across Europe and the UK, with scheduled flights, including a new gateway at London Gatwick.

The high yield to US destinations is encouraging many direct carriers to divert services away from Europe to serve trans-Pacific routes, which is hugely increasing the popularity of our Sea Air and Air to air options via SIN / CMB / DXB /AUH/ DOH for shippers seeking more economical options.

OCEAN

The availability of equipment, which has been such a problem for 12 months or so, has been improving at many origins, though India, Sri Lanka and Bangladesh prefer some time to position specific equipment and Dubai need advance notice of bulk shipments of ten containers, or more.

Transhipment ports in Asia are facing some delays, with Singapore and India ports experiencing berthing delays of two days and Sri Lanka three to four days.

Earlier in the year the US ports of Los Angeles/Long Beach had 25-30 vessels waiting in the harbour and today there is approximately 80-90, with the East Coast (NYC, SAV, MIA) seeing between 20-40 vessels.

With port operations elsewhere largely improving, we would hope to see carrier schedule reliability follow suit, but nothing can be taken for granted.

Demand from China is still high and carriers are keeping rates high, as they are expecting demand to stay strong till Lunar New Year and we can only expect rate levels to reduce should there be a drop in demand.

From other origins demand varies, but is consistently strong enough to keep rates elevated and the lines deferring contracts in favour of FAK spot rates.

RAIL

Despite the launch of new services and routes, and plans to modernise infrastructure, rail services from Asia have been increasingly overwhelmed by volumes, suffering catastrophic congestion and delays at key points.

The only SE Asian origin that has a potential rail freight service to Europe is from Vietnam (Hanoi/Haiphong) but that service is so oversubscribed, due to very limited capacity, that we would not consider it a viable option.

In summary, inflated prices and transit times that have doubled (35 days + 7 to 14 days for transfer to UK), due to congestion everywhere, mean that rail is taking as long as sea freight and costing considerably more. It is not worth considering at this time.

The supply chain impact of Omicron is still to be felt, which is why we continue to monitor the emerging situation closely with our network partners.

We will share important news and developments, often before it is in the public domain, so that you can make informed decisions and protect your supply chain.

For further information, or to discuss any particular concerns, please contact Elliot Carlile or Grant Liddell.

Metro will always provide you with the best alternatives and options, supported by a proactive team, leading-edge technology and open communication. Supply chain solutions that are designed around you, your situation and needs.

£150m stolen from supply chains in 2020

Apr 29, 2021 | Air, Insurance, Project, Rail, Road, Sea, Sea/Air, Supply Chain

Over £400,000 worth of goods in transit were stolen every day from Europe, Middle East and Africa (EMEA) supply chains in 2020, even with many countries being under lockdown for much of the year.

The Transport Asset Protection Association (TAPA) recorded 6,463 cargo thefts across 56 countries in the EMEA region despite widespread lockdowns, with average daily losses of £410,082 and total losses amounting to £150m, with warnings that these figures were likely to be the ‘tip of the iceberg’.

While most businesses were focused almost entirely on survival, and law enforcement on policing new government lockdowns, traditional channels of cargo crime data were severely impacted.

However, while some criminal operations would have been disrupted by lockdown measures, 2020 still saw the second-highest rate of incidents in TAPA’s 24-year history.

Only 65.1% of organisations reporting thefts to TAPA shared financial data and TAPA believe that if they had been able to maintain the same level of data sharing from EMEA law enforcement agencies as in normal years, 2020 would have set a new record for cargo crimes.

The total picture of supply chain crime is opaque, because most cargo thefts during road, ocean, air and rail transportation are not reported by victims to TAPA’s incident database.

While the UK and Germany accounted for 74% of cases, with 3,100 and 1,727 crimes respectively, the statistics more accurately reflect the proactive sharing of cargo crime data by British and German law enforcement agencies, than comparative crime levels.

Cargo thieves were quick to target shipments of PPE, with a single break-in to a facility in Santiago de Compostela, Spain, in April 2020 taking PPE equipment worth over £4m.

Trucks, trailers and last-mile delivery vans were the most popular targets for cargo thieves, leading TAPA to call for 2,000 new EMEA secure truck parking sites and 400,000 parking places, to prevent vehicles being robbed at unsecured locations like laybys, truck stops and motorway service areas.

The lack of secure truck parking, especially in Europe, was identified in over half of all crime reports to TAPA in 2020.

The highest number of violent attacks took place in South Africa, followed by the UK, Spain and France.

While we take every care to protect our customers’ cargo, including only using secure parking areas and the use of trackers for high value/risk loads, the figures released by TAPA should act as a wake-up call for everyone involved in the movement of goods, because almost every type of cargo is a target for criminals.

Carriers trading conditions limit their liability, which means that if you are a victim of supply chain crime during their carriage any compensation you receive under their terms and conditions is likely to be considerably lower than your actual loss, which is why we recommend All Risk marine insurance to protect you to the full value of the goods.

Metro work with selected partners to offer All Risk marine insurance cover that protects your cargo during every stage of transportation and storage, on a per shipment or annual cover basis.

China – Europe rail options expand further

Sep 30, 2020 | Rail, Supply Chain

October sees the launch of a new multimodal sea-rail service from Altynkol on the Chinese border, to Hamburg, boasting transit times of 12-14 days from Chongqing to Hamburg.

The service, a strategic joint venture between Russian Railways subsidiary JSC and Frankfurt based Belintertrans (BIT-Germany) will initially consist of two train departures every day for Hamburg, with technology synchronising operations, to reduce shipping times.

JSC and BIT intend to coordinate the movement of their trains with the shipping lines’ fixed timetables, reserving specified volumes of cargo for each sailing, with transshipments between the different modes carried out in accordance with agreed schedules.

UTLC ERA will arrange the container rail transport between Altynkol and ports in the Kaliningrad region, while BIT-Germany will organise the sea container leg to Hamburg.

With the companies operating together, shippers will have a single platform for all the shipping documentation along the route, and an end-to-end price; a single transportation package, for the smooth movement of containers along the entire route.

With the demand for sea freight from Asia accelerating and likely to continue into November or even early 2021, well beyond when the peak typically subsides and the shipping lines continuing to restrict capacity, alternative services have to be welcomed.

Throughout 2020 we have seen rail and intermodal services becoming more popular, with Maersk announcing this month that its test sea/rail/sea service (AE19) would become a permanent weekly service, following its successful trial.

AE19 covers short-sea routes from Korea, Japan and China to Nakhodka in the far east of Russia, switching to rail to St Petersburg, followed by another short-sea service to European ports.

In large part due to demand, with volumes were up 36% year on year, rail services endured significant congestion in July, leading to long delays in places.

To address one hot-spot, Russian Railways will rebuild and modernise the infrastructure at the Valjevo-Vrbnica border with Montenegro. Work starts in 2022.

Much of the current demand is being created by PPE movements into mainland Europe which are still critical although air freight is being avoided due to cost. Currently most of the capacity is through to Germany or Spain terminals with feeder or trucking to The UK which makes this mode less attractive due to increased length of transit adding a further 7 days to the railhead to railhead transit time.

If you have any questions regarding these rail developments or would like further information, updates, or the latest market pricing please contact Chris Carlile or Grant Liddell.

General Global freight market update

Aug 20, 2020 | Air, Rail, Sea, Supply Chain

The current market conditions are a real mixed bag dependent on trade lane, mode of transport and region. Whilst some areas of global trade are experiencing extreme congestion, other areas are operating as normal for this time of year. Below is an overview of the current situation.

Sea Freight

Focusing on the westbound import ocean freight, there is high demand being experienced from China, South East Asia and the Indian subcontinent.

Widely publicised vessel omissions from base ports, reduction in carrier schedules, congestion at transhipment hubs and a significant increase in global demand for products being sourced from Asia. As a result, carriers are being bullish with long line capacity commitments on contracted space and implementation of rate hikes on the spot/FAK market where the model appears to be ‘pay to play’. Some carriers are creating roll pools and generally the market from Asia is seeing containers being offloaded from allocated vessels on a frequent basis.

Ocean freight rates on the Asia to North America routes are at a 5 year high, a good indicator of what will come on the European trades lanes with probable pricing increase. Carriers have announced further increases on the trade, with peak season surcharges and ocean freight rate rising due to be implemented later this month and into September.

Export ocean freight trade has fared better and rates are stable, although still much higher compared to year on year with 2019. Generally, capacity is available with the exception of the Trans-Atlantic routes being the primary area for potential delays and increased pricing. This is predominantly being experienced at US East Coast ports, however, the situation with Montreal port is enhancing issues with Canadian destined container traffic.

UK ports are currently experiencing disruption, including the major ports Felixstowe and Southampton, on the inbound trade due to influx of high volumes of containers and also with new Covid19 processes and general haulage congestion.

Air Freight

The global air freight market is still operating with a vastly reduced belly hold capacity. The majority of passenger aircraft are still not operating due to pandemic-induced lack of demand. Many carriers are still operating passenger freighters, with some airlines removing seats from aircraft to increase their cargo uplift.

Pure freighter services are still in high demand, with rates two to three times higher than they were this time last year on the majority of lanes. Dwell times have reduced from the global highs of May and June and uplift generally is being made within a reasonable time-frame. Some areas are still experiencing capacity shortage, notably, the Australasian and American routes from the UK and Europe.

Due to the launch of many new electronic products, and the potential development and extreme demand of a covid19 vaccine, the airfreight market will pick up quickly. This will result in a global impact on increased demand versus a static supply. This is without the traditional increase in general air cargo volumes experienced during Quarter 4 of the year. It could be a very congested time for air freight movements from September.

Land Freight

Overland services and trucking are functioning as normal with limited delays at borders throughout Europe presently. We anticipate this will change the closer we get to full withdrawal from the EU and as we transition into our new relationship with Europe.

Inland rail freight is in high demand with new services being added and established services being reinstated over recent weeks and months. New train services have been added to cope with the demand, operating on the East Midlands Gateway terminal with intermodal operations.

Metro will continue to report on the latest market conditions and always provide the options available and best fit solution against requirements and expectations.

Finally, we would remind you to please provide transparency and visibility of your forecasts for global movements. This will ensure we can plan and secure capacity as far ahead of time as possible as we enter the traditionally busy ‘peak season’. If we can foresee what is coming through the cargo pipeline, then we can ensure that there will not be any issues, or source alternative services to keep your supply chain moving.

For further information and any new specific projects please contact your usual Metro account handler or CRM manager and we will provide the latest updates.