Coronavirus COVID-19 | November Updates

November 25, 2020

Read the latest on Operations and Carrier updates. For questions, comments, or assistance, please contact us.

We understand there have been many impacts this year on the air, ocean, and ground freight markets. At Crane Worldwide Logistics, we strive to provide our clients with the best service and communicate the most current information impacting the market. Find below updates for November 2020. To see our previous updates, please visit our Coronavirus COVID-19 Resource Center.

We have warehouse space available, ground transportation options globally, book air charters, and fill space on ocean carriers.

Week 48 (November 22 - 28)

U.S. Customs and Border Protection assesses an annual user fee for each customs broker district and national permit held by an individual, partnership, association, or corporation.  CBP has announced 2021’s user fee is $150.33 and is due to CBP no later than January 29, 2021.

AMS Filing Fee

On October 28, 2020, we announced that the AMS surcharge will increase from $35 per BL to $50 Per BL with an effective date of December 1, 2020. The application of this change is based on a calendar date as it pertains to the increase. Crane Worldwide Logistics’ tariff rules have been updated accordingly and are available on our website.

This action is a result of changes in the market.  We are consistently monitoring tariff activity to ensure we not only cover our costs but remain competitive in the marketplace.

Ocean Operations

  • Drivers are facing difficulty returning empty containers in New York and New Jersey.
  • Truckers serving the Port of New York and New Jersey say difficulties in returning empty containers to ocean carriers are getting worse, amid a new federal investigation into whether ocean carriers’ operational issues and practices are contributing to congestion at the top East Coast gateway.
  • Between 25 percent and 30 percent of truck trips at the port in 2020, truckers were able to drop off containers, primarily empties, and also pick up a full import load, according to data from the Port Authority of New York and New Jersey. That compares to about 70 percent of truck trips in late 2014.
  • The US Federal Maritime Commission on Friday said problems in returning empties to their point of origin is one of the practices that “are having an unprecedented negative impact on congestion and amplifying bottlenecks” at the ports of New York and New Jersey, Los Angeles, and Long Beach.
  • As part of its ongoing investigation into supply chain inefficiencies on both coasts, the FMC is now looking at whether the difficulties truckers face in returning empties results in “unreasonable” detention charges under the US Shipping Act of 1984.
  • With ocean carriers sharing space on the vast majority of ships calling New York and New Jersey, vessels often call at multiple terminals, making it more difficult for truckers to match empty returns with import pickups.
  • The port needs to wrest all the efficiency it can from trucking as it grapples with a holiday peak season mixed with worries about how another COVID-19 lockdown could affect physical operations at the port as well as cargo demand. Container imports from Asia through NY-NJ jumped 10 percent to 203,840 TEU in October from September, according to PIERS. Source: JOC

Ocean Port Operations Status

  • Prince Rupert and Vancouver: Vessel wait time is 4-5 days, Port delays are an additional 3-5 days.
  • All U.S. ports will be closed Thursday, 11/26 for Thanksgiving.
  • Seattle: Friday, 11/27 – T18 and T30 all day close.
  • Los Angeles/Long Beach: Friday, 11/27 – Everport, Pier J, and WBCT 2nd shift closed.
    • Vessel wait time is 3+ days
    • IPI On Dock Rail delayed 3+ days
    • Major Chassis shortages, delaying MLB/Doors, average LALB MLB dwell is 3+ days, some stragglers aging to 7+ days
    • Cargo is buried, expediting containers from any terminal after discharge is quite difficult
  • Virginia: New crane delivery and expected to be operations week 1 2021. The impact is lost berth space November 2, 2020 – January 5, 2021.
  • New York/New Jersey: Vessel wait time is 3-4 days

Rail Update

  • BNSF Network fluid.
  • CN is experiencing congestion at many inland ramps with restrictions for in-gates being enforced.
    • Customers are requested to please take delivery of containers as they arrive at rail ramps.
    • CN released their winter schedule, it lists rail challenges for handling inclement weather conditions and actions to support customers.
  • CP is supporting efforts to keep cargo moving between Toronto and Montreal.
  • Using CP for Vancouver to Toronto/Montreal and vice versa with two vessels starting early December.
  • CSX Network fluid.
  • FEC Network fluid.
  • KCS Network fluid.
  • NS Network fluid.

New Silk Road Europe - China

  • Rail transport between China and the Netherlands has become very important since the Silk Road has been extended to Tilburg, NL in 2016.
    • The Connection to Tilburg opens new Short Sea connections via Rotterdam to the UK with a faster connection.
  • New Russian subsidies opened a new routing from Japan via Vostochny, Russia to Europe. The stable Short Sea Service from Japan to Vostochny and the speed of the customs process made it possible to cut the transit time in total.
  • The first train departed on the 18th of November.
  • Read Article: Why Hugo Boss takes the train on the New Silk Route
  • Container imbalance on Westbound. Trains are going full to Europe and currently empty back to China which creates limited equipment of 40ft. units in China.
  • Space extremely tight on Westbound. Please see below Space allocation
    • Chengdu-Duisburg: 1x40ft. HC Container per departure MON/WED/THU/SUN
    • Chengdu-Tilburg : 2x40ft. HC Container departure Monday + 2x40ft. HC Container Departure FRI or SAT
    • Hefei – Neuss : 2x40ft. HC Container per Week (Departure WED)
    • Xi’An – Duisburg/Hamburg : 2x40ft. HC Container per Week
    • Zhengzhou – Hamburg : 3x40ft. HC Departures 1st of December
  • Eastbound rates are stable and low, therefore eastbound could be a good option at the moment for all importers
    • Duisburg – Xi’An : 750USD CY-CY incl. Terminal Charges at Origin / Destination
    • Duisburg – Wuhan : 1050USD CY/CY incl. Terminal Charges at Origin / Destination

Commercial Air Operations Update

IATA released an information page listing airlines' status globally, which is free for all to access. Visit the page here.

Charter Operations and Aircraft Availability

What charters do Crane Worldwide Logistics have available?

  • Peak Season is approaching, be prepared, and plan.
  • Capacity is available for charters globally. Contact us for current rates and availability.
  • We have seen opportunities for part charters (20 tons and up) recently but not seen regularly.
  • If you have an opportunity, send us the details, and we can work on the current, part charter capacity, and pricing. Charter prices are based on current availability, and that could change rapidly. Size and rates have been fluctuating a lot over the past few days.
  • Crane Worldwide must have a signed charter authorization from our client before signing the charter contract with the provider.  Make sure you have someone standing by to sign agreements; capacity and rates change quickly.
  • On all charters, funds must be received from our client before wheels up.

Air Freight Update

PVG - Shanghai’s Pudong Airport reportedly descended into chaos on Sunday evening after two cargo handlers tested positive, and went into lockdown as nearly 18,000 other staff were tested. Hundreds of flights were canceled, according to Reuters, and videos were posted on social media of apparently frightened passengers attempting to flee the airport. Now new COVID regulations are expected to lead to cargo delays. According to local media, Chinese health officials claimed the cargo workers, employees of FedEx and UPS, were “cleaning a cargo container from North America”. It was not carrying cold chain cargo, however, as in August, when authorities said traces of the virus were found on imported frozen food “All cargo terminals have been shut down and all-cargo operations were obliged to stop over the weekend. Import handling is progressing, but with expected delays. “Customs inspections have also closed until further notice. “Airlines, including Emirates, Qatar Airways, Cabo Verde, Lufthansa, Nippon Airways, Polar Air Cargo and Air China, had flights impacted by the lockdown, Geodis added, noting that local authorities had requested all ULDs to be disinfected upon arrival.

Air France-KLM - This week they started a new weekly Tunis (TUN) wide-body service, departing CDG on Wednesdays. Further, they are commencing a twice-weekly (normally Fridays and Sundays) Moscow (SVO) wide-body service ex-CDG on 04DEC. This will provide new options in their network.

Air New Zealand - The Government has shortlisted Air New Zealand under Phase Two of the International Airfreight Capacity (IAFC) scheme between December 1 and March 31, 2021. Contractual negotiations are yet to be concluded but the proposed schedule is similar to our schedule over recent months. If successful we will continue operating services between New Zealand and North America (Los Angeles and San Francisco), Asia (Hong Kong, Shanghai, Narita, Incheon), Australia (Sydney, Melbourne, Brisbane), and Pacific Islands (Fiji, Tonga, Samoa, Rarotonga, Niue). Also proposed are the additions of new Guangzhou services, seasonal Perth services, as well as some enhancements to the ongoing schedule by way of triangulated routing to improve the connectivity for South Island Exporters. Those proposed flights will depart from Auckland to Christchurch on the first leg, before heading out internationally to each of Los Angeles, Shanghai, Guangzhou, and Hong Kong, before returning back to Auckland. These services will allow us to move international shipments from both Auckland and Christchurch out of New Zealand to key export markets on a single wide-body aircraft. Conversely, this will provide seamless connectivity for import cargo to Christchurch via Auckland.

Ethiopian Cargo - Has launched a transpacific freighter service between South Korea and the US. The new B777F service operates from Incheon to Atlanta via Anchorage, with its first flight taking place on November 9. Ethiopian Group chief executive Tewolde GebreMariam said: “We are delighted to have launched our newest freighter service to our cargo forwarder customers worldwide, extending from Incheon to Atlanta via Anchorage in the current global pandemic crisis where speed in the supply chain management is highly required to deliver urgently required goods.”

Volga-Dnepr Group - Has grounded all of its AN-124s following a recent incident of engine failure that required an emergency landing at Tolmachevo Airport in Novosibirsk, Russia. Chief Commercial Officer, Konstantin Vekshin stated, “we want to be proactive and preemptive and demonstrate that we are a responsible airline where safety comes first.” A letter was filed today with the Russian aviation authorities to notify them of their decision to ground eight operational aircraft immediately. They are launching an investigation into the recent events. Volga-Dnepr is rearranging flights to accommodate their customers since all of their freighters were fully booked. Some cargo will be loaded onto 747s and their rival airline, Antonov Airlines, may have to support other shipments. It is unknown when their fleet of AN-124s will be operational again.

Ground Operations

  • The trucking industry anticipates growth to continue into 2021, even with the ongoing driver shortage. Many carriers have announced driver pay increases which indicates an expected increase in load volume. The consumer is driving the current demand but signs of life in the industrial sector are now seen. Demand is high, volumes are strong and capacity continues to be tight across the country for most equipment types.
  • Tender rejections rose this week to another all-time high at 27.84%. Compared to previous years, rejection rates are exceptionally strong, more than 2,000 bps higher than 2019 levels and more than 1,200 bps higher than 2018 levels.
  • The impact on peak season was half as much a gain this year from September to October when compared to last year.  This is more a reflection of a strong September, or the earlier start of peak season, than a falloff in October volumes. Dry Van spot rates were up 50% year over year last week, but adjusted for normal seasonality is off its high from early October. Contract pricing is now showing this impact with the Cass shipment index up in October for the first time in two years.
  • Southern California ports continue to suffer labor and equipment shortages while dealing with a record level of imports. This extended surge is causing extensive delays in throughput.
  • Class 8 truck orders are rising with 39K units ordered in October. That is the highest level in 2 years and up 80% from October 2019.  Manufacturing production is still in line with historical replacement levels, so that does not equate to a sudden influx of available tractors into the market.
    • The nationwide average price of diesel fuel increased 2.1 cents per gallon, according to U.S. Energy Information Administration data released Nov. 23. EIA reported that the price of diesel rose to $2.462, and trucking’s main fuel now costs 60.4 cents a gallon less than it did a year ago.

Global Border Crossing Status and restrictions

  • Facilitated by the United Nations Economic Commission for Europe read more here

Land Borders

  • Sixfold have a free application that maps out European borders with live information on crossing times read more here

Week 47 (November 15 - 21)

Ocean Operations

  • Ecommerce demand specifically from South China and Ningbo is increasing at a dramatic pace due to people are spending more of their disposable income on home-related items due to they are not traveling or dining out as much as they did in the past. Expecting this trend to last means vessel space from South China ports such as Yantian and Ningbo will be very full.
  • Equipment detention free time in the USA.
    • We believe the VOCC will take a much harder position and will likely be very selective on extending through negotiations additional free time for the container at no cost. The reality is this is causing a major problem for the entire Ecosystem as containers are being used for additional warehousing which is also using chassis as well. So, we would encourage all to start thinking about the potential impacts when you consider equipment detention after normal free time which is usually the day of notification plus four business days may be what you have to manage with unless you want to pay on average a minimum of $150 per day per container after free time expires.
  • As of today, there are 15 container ships anchoring outside LA/LB waiting to berth. I would encourage all to properly plan lead times that you need to build in 3 days to port to port published transit time to account for vessel unloading time. If cargo is moving inland via rail add 9 days just to get the ocean container on a rail flat car prior to moving out. If it is being picked up by truck please build in 3 days additional simply to get the container out of the terminal. This is all about managing expectations to avoid somebody being disappointed. I would suggest this will continue well into Q2 2021.
  • If you have questions or concerns about ocean transport budgeting for 2021 please engage us as we certainly have perspectives based on our financial modeling that we can openly discuss to better position your company and to maintain cost competitiveness.
  • In October 2020, the Purchasing Managers' Index (PMI) in China resided at about 51.4 percent. An indicator of the economic health of the manufacturing sector, the PMI is based on five major indicators: new orders, inventory levels, production, supplier deliveries, and the employment environment. An index value above 50 percent indicates a positive development in the industrial sector, whereas a value below 50 percent indicates a negative situation.
  • Israeli carrier ZIM has announced the launch of a new Mexico-Tampa Shuttle service (MTS), commencing in mid-December. ZIM intends to expand its regional network and thereby provide great new options for its customers in Mexico & the US. The new MTS service will deploy a 1000-TEU vessel on a weekly, fixed-day schedule between the port of Altamira, Mexico, and Tampa, Florida in the US. The service will depart Altamira on Fridays and call at Tampa on Mondays. Along with a best-in-market 3-day transit time, the new MTS service offers many advantages to customers, that include:
    • Guaranteed space allocation and container availability (dry, reefer & special equipment)
    • Calling at ATP Terminal in Altamira to provide the most reliable quality service
    • Extended cut-off dates and quick IMO Cargo approval process
    • Door-to-door and end-to-end inland service
    • Fully dedicated ZIM-operated vessel
    • Strong, reliable & highly experienced organizations and follow-up in Mexico and the US
  • MSC Mediterranean Shipping Company is pleased to introduce an express service for cherry and fresh fruit cargo from Chile to Asia, effective 18 November 2020. To reinforce the express service offering, MSC will also deploy two more vessels exclusively for weeks 49 and 51. The Cherry Express service will run as a joint carrier agreement, connecting Asia and the west coast of Latin America. The service will connect Valparaiso, Chile with a fast transit time to Hong Kong in 23 days. Shipments will arrive in Nansha and Shanghai in 25 and 26 days respectively, via transshipment from Hong Kong. In addition, shippers can rely on MSC’s feeder network to reach other Southeast Asia destinations.  To complement the regular Cherry Express service, MSC will operate exclusively two more vessels with fast shipping service for weeks 49 and 51. Both vessels will sail on different days compared to the regular schedule, allowing customers greater flexibility during loading. The two vessels will also provide a direct connection to a few different ports in Greater China, offering customers more choice in terms of destination ports.  In week 49, MSC Alessia will be calling at Shanghai and Hong Kong with transit times of 22 days and 25 days respectively. In week 51, MSC Fiammetta will be calling at Nansha and Hong Kong with a transit time of 23 days.  With concerns around cargo contamination still mounting amid the ongoing pandemic, fruit exporters in Chile can also rely on MEDLOG, MSC’s logistics arm, to provide sanitized containers as a safety measure against COVID-19. MSC is committed to meeting the needs of its customers and is proud to offer this added service through its exclusive tie-up with MEDLOG in Chile.  Cristian Montenegro, Commercial Director of MSC Chile commented: “We’re very excited about the launch of the Cherry Express service. With the introduction of two complementary vessels and the support of our MEDLOG depots in Chile, MSC will be able to reinforce this service by maintaining a constant flow of containers for our export customers.”  “Cherries have become an increasingly popular fruit in China as consumer spending power rises across the country. Furthermore, the timing of the Cherry Express leads up nicely to the Chinese New Year. Red Chilean cherries are especially popular during this period with consumers as the red fruit symbolizes prosperity and fortune,” said Pikkei Yuen, Inbound Sales Manager, MSC Hong Kong/South PRC/Taiwan.
  • Hapag Lloyd has announced that it will be enhancing their current and weekly Caribbean Express Service (CES) as follows:
    • Continuation of the current Hapag-Lloyd stand-alone product
    • Combination of North Europe and one port of call at the U.S. East Coast – Westbound only as primary service into Norfolk, VA in addition to the existing Atlantic-Service AL1
    • Attractive transit times from North Europe to the Caribbean destinations maintained
    • Increase of the schedule reliability by deploying the sixth vessel
    • No changes to the highly competitive Northbound transit times for Reefer customers
    • Update CES Port Rotation: London Gateway – Rotterdam – Antwerp – Norfolk, VA (U.S.) – Kingston – Willemstad – Oranjestad – Santa Marta – Puerto Limon – Caucedo – London Gateway

Air Freight Update

Air China - China National Aviation Holding, the parent company of the country’s flag-carrier Air China, agreed to sell a total of 31% of its air cargo unit Air China Cargo stake to four investors. The deal valued Air China Cargo at up to 15.7 billion yuan ($2.37 billion). According to the announcement issued by Shenzhen International Holdings on November 10, 2020, three investors including Alibaba’s logistics arm Cainiao, Shenzhen International, National Reform Double Hundred Development Fund and Air China Cargo's employee shareholding platform invested a total of 4.9 billion yuan ($740 million), which is equal to 31% of the whole company’s shares, to increase the capital of Air China Cargo. Shenzhen International reported that after the capital increase project would be finalized, the Chinese company would hold a 10% of Air China Cargo stake and would nominate the director. Meanwhile, the other three investors including Alibaba's logistic arm Cainiao would hold 21% of the stake. By the transaction, Air China Cargo was valued at more than 15.7 billion yuan ($2.37 billion), 1.72 times higher than a book value, counted Caixin, the Chinese financial media group. According to a public bidding document from the Beijing Equity Exchange released in August 2020, Air China Cargo started its ownership reform back in 2018 after its controlling shareholder China National Aviation, which currently owns 65% of the company's shares, initiated the mixed-ownership reform. In August 2020, Air China Cargo decided to sell one-third of this stake with an aim to strengthen and optimize its capital and become the e-commerce and logistics integrated service provider with purchasing, transportation, and sales capabilities. While having a total of 15 freighters on its fleet including three Boeing 747-400F aircraft, four Boeing 757-200PCF freighters, and eight Boeing 777F cargo planes, Air China Cargo also operates all its parent company’s Air China passenger jets belly compartment business.

Emirates - Battles the current crisis, it posted its first half-year loss in 30 years. The Dubai government was more than eager to provide the airline with financial support to help weather the storm. Emirates announced its H1 FY2021 results on November 12, 2020, in which it indicated that the Dubai government injected $2 billion into the airline by a way of equity investment. “We have been able to tap on our own strong cash reserves, and through our shareholder and the broader financial community, we continue to ensure we have access to sufficient funding to sustain the business and see us through this challenging period,” commented chairman and chief executive of the airline Ahmed bin Saeed Al Maktoum. Overall, the company’s cash reserves dwindled from AED25.6 billion ($7 billion) at the end of March 31, 2020, to AED 20.7 billion ($5.6 billion) as of September 30, 2020. Emirates lost 75% of its airline revenue and throughout the first six months of the year, the carrier netted AED11.7 billion ($3.2 billion) from passenger and cargo operations, which resulted in an AED12.6 billion ($3.4 billion) loss. “As passenger traffic disappeared, Emirates and dnata have been able to rapidly pivot to serve cargo demand and other pockets of opportunity. This has helped us recover our revenues from zero to 26% of our position at the same time last year,” commented Al Maktoum.

Virgin Atlantic Cargo - Has added a new pharma service ahead of the launch of a new Covid-19 vaccine. The airline said its new Pharma Secure service will cater for urgent, valuable and vulnerable pharmaceutical and life sciences shipments. The product will include a 24/7 support team, automatic live status updates, proactive service recovery and periodical integrity checks, temperature-controlled facilities and a dedicated booking team. It also includes security escorts (on request), dedicated email for bookings, quotes and support, priority access to capacity and unloading at Heathrow, money back guarantee, GDP trained staff and access to temp-controlled facilities. Dominic Kennedy, managing director, Virgin Atlantic Cargo, said: “This new service takes our already well-established pharmaceutical offering to the next level. We want to offer our customers peace of mind so they can book confidently with us, knowing their precious cargo will arrive safely, securely and on time. “We look forward to playing a part in supporting the Covid-19 recovery by transporting crucial vaccines and pharmaceutical products to the UK and around the world on our global network, ensuring swift access to vaccines for the public as they become available.”

Ground Transportation Operations

  • The trucking industry still faces higher demand with a diminished driver pool. This puts pressure on driver pay and along with rising insurance costs will push contracted rates up in 2021.
  • During recent earnings calls, many of the publicly traded trucking and intermodal companies are reporting record number of tender rejections and loads being turned down. This is supported by the weekly tracking of Outbound Tender rejections which continue to run well above historical numbers. As a percentage they are still topping 25%. 
  • DAT Truckload Volume Index set a new record in October with truckload spot rates at record highs. The average spot rate was $2.40 up 3 cents from September and 60 cents compared to previous year. The index increased 3.8% from the previous month and up 8.7% annually.
  • Intermodal volumes remained very strong last week, up 10% year over year, helping to drive up overall Rail volume by 3.4%.
  • As published in Transport Topics, Class 8 U.S. retail sales in October remained 18.4% below year-ago levels, but closed in on 19,000, Wards Auto reported. Sales were 18,774 compared with 23,001 a year earlier, according to Wards. It was the second-highest tally of the year, trailing only 19,126 in September. ACT Research noted it was watching how quickly OEMs and suppliers “can respond to the demand rally.”
  • Preliminary information for October from ACT Research, indicates that the US trailer industry booked 54,200 net orders for the month, up 6% from September and more than 68% better than the same month last year. “Fleet commitments over the past two months have now pushed industry backlog to the highest level since June of last year. Increases in both freight volumes and rates, along with capacity challenges, have influenced fleets to aggressively enter the market”, said Frank Maly, director CV Transportation Analysis and Research at ACT Research.
  • The weekly DOE/EIA average retail diesel price rose 5.8 cents a gallon Monday to $2.441 a gallon. That’s the highest one-week increase in prices since September of last year when Hurricane Dorian was impacting oil markets. The increase also brings the weekly price up to the highest level since Aug. 31 of this year when it was also at $2.441.


Week 46 (November 08 - 14)

Ocean Operations

  • Shortage of equipment is being reported in multiple inland ramps and locations in the US. It is recommended to plan ahead to ensure proper solution is found.
  • Port of LA/LB are still congested. In some cases, containers are sitting at the port but unavailable for pickup for over 3 weeks.
  • Advanced bookings are recommended for all trade lanes.

Fines for Misdeclared Container Cargo

  • Due to increasing number of maritime incidents reported in recent years, ocean carriers increased the fines of misdeclared cargo ranging from $5,000.00 to $35,000.00 per container. For LCL cargo the fine is being passed by respective co-loader.
  • The Dangerous Goods information associated with this violation may include: UN number / {PSN} Proper Shipping Name / CLASS / Flashpoint-(where applicable) / {PG} Packing Group and/or WEIGHTS OF THE DG PRODUCT.
  • Failure to properly offer and declare hazardous materials prior to shipment is a violation of the Hazardous Material Regulations. (HMR) Such violations are subject to monetary fines and/or criminal prosecution under applicable law.

IPI Service Delay

  • Due to the continued impacts of Covid-19, there are reports of equipment and capacity shortages that are contributing to IPI delays nationwide.
  • This is being felt especially in Los Angeles and New York gateways. These delays in transit times are possible and expectations are for these to continue in the 4th Quarter of 2020.

U.S. Marine Terminal Gate Operation Schedule on Veterans Day, November 11, 2020

The following Marine Terminal Gates are closed in observance of Veterans Day in the United States.

  • New York, NY
    • Maher Terminal
  • Oakland, CA
    • Everport
    • OICT
  • Seattle, WA
    • SSA-T30
    • SSA-T18

Air Freight Update

Atlas Air Worldwide Holdings - Will reactivate another B747 freighter after improvements in its third quarter figures thanks in part to expanded its e-commerce operations with Amazon and Alibaba. the lessor reported that third-quarter revenues increased by 24.9% year on year to $809.9m and net income increased 23.5% year on year to $74m. Meanwhile, adjusted ebitda improved by 105.3% to $196.3m.Volumes in the third quarter of 2020 increased to 90,528 block hours compared with 79,310 in the third quarter of 2019.Chief executive John Dietrich explained: “We continue to broaden our customer base and grow with existing customers to maximize market opportunities. We further increased our roster of long-term charter customers, including the addition of Cainiao, the logistics arm of Alibaba, as well as expanding with HP Inc. and several large global freight forwarders.

Hong Kong Airlines - The aviation industry is having another issue to solve, after Cathay Pacific, the largest airline in Hong Kong, ceased operation of Cathay Dragon. Most of the routes operated by Cathay Dragon are planned to be handled by Hong Kong Express, the Cathay Pacific's wholly-owned subsidiary. But in fact, it is not easy for Cathay Pacific and Hong Kong Express to take over most of the routes. According to the Hong Kong Transport and Housing Bureau, Cathay Dragon has to return the air traffic right back to the government and can't transfer the right to other companies on its own. It also means that routes previously operated by Cathay Dragon are available for bidding by other carriers, and Hong Kong Airlines is seen as a possible beneficiary. However, the routes probably won't be utilized under the pandemic, no matter who the operator is. There is no timeline on this matter, so it might also take 1-2 years to prepare for the bidding process and settle down. A senior executive of Hong Kong airlines said to South China Morning Post that they are cautious about expansion after Cathy Dragon's shutdown and will currently focus on COVID-19 survival. The financially troubled Hong Kong Airlines currently operates about 5 to 10 percent of its flights with fewer than 10 aircraft. It is also a member of the Chinese aviation conglomerate - HNA Group. At its peak, it employed more than 3,900 people and operated 38 aircraft. The airline is one of the first to lay off about 400 of its 3,500 staff during the outbreak back in February. Since then, Hong Kong Airlines has cut the pay of more than 1,200 flight attendants by 30 percent in four months. Pilots' salaries and allowances were reduced by 60 percent in six months. In Cathy Dragon's case, about 2,500 crew members were made redundant, but Hong Kong Airlines said it is unable to take over any of them at the moment. Like many other airlines, Hong Kong Airlines also launched its version of "flight to nowhere" last Saturday. The tickets for "Embrace Home Kong" were sold out quickly. More than 100 passengers were on board to enjoy the very first Hongkong - Hongkong flight.

IAG - Owned Iberia has introduced its first A330 preighter aircraft as it prepares for the air cargo peak season. The company said that the A330’s economy and premium economy seats, as well as crew rest area, were removed along with separation panels by its own MRO business. Carpeting was reinstalled with lights indicating the 33 cargo positions. Cargo will be held in place with netting fastened to floor rails where the seats were anchored. This configuration yields additional carrying capacity of up to 105 m cu or 18 tons of cargo. The aircraft will operate a four-times-per week service between Los Angeles and Madrid. “In the early months of the Covid-19 pandemic, Iberia’s flight operations were almost exclusively confined to repatriation flights and flights carrying emergency medical supplies,” the airline said. Iberia’s sales chief María Jesús López Solás said: “We’re expecting an increase in air freight demand in coming months and this in an opportunity we should try to seize. Under today’s circumstances we must adapt better than ever to market demands, and this operation will help diversify our income streams while keeping our staff active.” IAG Cargo will service these flights. IAG Cargo has been operating cargo-only flights over recent months and also added a charter team. IAG Cargo offers its services on more than 500 aircraft, to more than 350 destinations.

Norwegian Air - The Norwegian government will not provide additional financial support to its largest airline. Hard-hit by the coronavirus crisis, Norwegian Air is now facing an uncertain future. The airline grounded most of its fleet in March 2020. In August 2020, it announced it would run out of cash in the first quarter of 2021 unless it secures fresh funds and support from the government. Already in great financial difficulties at the beginning of 2020, Norwegian was also hit hard by the coronavirus COVID-19 pandemic. As it was on the verge of bankruptcy, the company secured $300 million in state aid guarantee in May 2020, along with the conversion of part of its existing debt and its financial commitments into new shares. In total, the Norwegian government has already supported the airlines with NOK 13 billion (about €1.2 billion) subsidies. Norwegian has asked for a new billion-dollar rescue package from the state and was given a negative response. “Norwegian Air has asked for billions of crowns in additional support, and the government has concluded that this would not be a responsible use of public funds”, said Industry Minister Iselin Nyboe. “The fact that our government has decided to refrain from providing Norwegian with further financial support is very disappointing and feels like a slap in the face for everybody at Norwegian who is fighting for the company when our competitors are receiving billions in funding from their respective governments”, said Norwegian’s CEO Jacob Schram in a press release. Evaluating the effects of the current situation, the company suggested that more funding could come from the sale of aircraft or debt-to-equity conversion. This setback comes months after the Swedish National Debt Office also rejected Norwegian’s request for a state credit guarantee. Sweden judged that the air carrier was already in a precarious situation before the pandemic, and thus was not eligible to receive financial support from the state.

Week 45 (November 01 - 07)

Ocean Operations

  • We expect that the current 40 HC imbalance situation will last through the end of Q1 2021 based on the facts as we know them to be. As such, our advice is that all shippers remain flexible with regards to using 40 standards or 2 20’s if required to maintain fluidity in their supply chain. Otherwise, many of the HC demand is dependent on imports that would feed the next export move.
  • Congestion and chassis shortages continue to be an issue within LA/LB terminals and NY/NJ terminals, which we believe will also continue through Q2 2021.  We highly suggest that you engage your service provider to understand how present dwell times impact total lead time so you can prepare to manage expectations within your company.  If you are relying on posted VOCC schedules, that is not going to be realistic or accurate.
  • Matson has made changes given the demand for their premium trans-Pacific services.
    • Matson Navigation Co. has made permanent the second weekly China-to-Long Beach service launched in May as a temporary loop.
    • Matson in May found the CLX+ service from the same load ports in China — Shanghai, Ningbo, and Xiamen — that it operates its premium CLX service to Long Beach. Matson chairman and CEO Matthew Cox last week, in the company’s third-quarter preliminary report, said he was “confident” the carrier would make the weekly CLX+ permanent; a spokesperson for Matson on Wednesday confirmed that has happened.
    • The CLX+ service will operate with vessels of 2,800 to 3,500 TEU capacity.
    • Matson has operated the CLX service, with vessels of 2,800 to 4,500 TEU capacity, to Long Beach for 15 years. In addition to a transit time of 10 days from Shanghai, compared with about 12 days for most Pacific Southwest services, the CLX service offers guaranteed next-day container availability after vessel arrival in Long Beach.
    • Matson’s move reflects the growing demand for expedited services in the trans-Pacific as Chinese importers funnel cargo through the Los Angeles-Long Beach port complex. Elevated air cargo rates, the time-sensitivity of e-commerce shipments, and upcoming tariff-related deadlines spur more shippers to embrace expedited services and those that guarantee drayage and equipment at marine terminals of destination.
  • CMA-CGM/APL and Zim Integrated Shipping Services also offer premium services that feature guaranteed equipment availability, rapid transit times, priority loading at Asian ports, and priority unloading in Southern California. The CMA CGM EEX service offers a transit time of 11 days from Shanghai and 12 days from Ningbo to Los Angeles.
  • Much of the growth of USA imports from China moving via LA/LB in September are a direct result of eCommerce fulfillment and time-sensitive personal protective equipment (PPE).
  • ZIM has entered China to Australia trade in October after being gone for about five years.  ZIM has introduced a direct China to Australia service.  It is called the “China –Australia Express” (CAX). Gold Star Line participates and markets the offer as its ‘GCA’ service. The new service comes during the peak season in the trade expected to run until the end of the year.
  • Pacific International Lines (PIL) has asked Singapore’s regulators for permission again to delay the filing of its audited 2019 financial results. PIL requests a new deadline while it continues restructuring talks with potential investor Heliconia Capital Investment and the 15 key lenders. PIL stated that a new filing delay would allow the restructuring’s key terms to be considered part of the financial statements and allow auditors to verify certain assumptions. Heliconia, a subsidiary of the Singapore government, is expected to take a potential debt of equity investment in the carrier. PIL earlier confirmed it could default on several loans this year, including the $60 M fixed-rate bonds due November.
  • The vessels’ total capacity, where scrubbers have been installed, represents 5.78 M TEU, which is just under 25% of the entire container fleet.

USA Rail Update

  • BNSF Network fluid.
  • CN Experiencing congestion at many inland ramps with restrictions for in-gates being enforced.
  • CP supporting efforts to keep cargo moving between Toronto and Montreal.
  • CSX Network fluid.
  • CSX network is challenged with peak season volumes – especially Chicago to Newark.
  • CSX has adopted several measures to include increasing train length to the maximum permitted on the network, increased number of trains per week and expanding receiving windows for weekend train departures (allowing earlier in gate on Friday). These measures have proven beneficial over the past few months, however as the demand continues to grow/increase these past two weeks customers/Shipping Lines are having a difficult time securing reservation. Rather than placing embargo’s (gate closures as other RR’s have adopted), CSX continues to seek alternatives to manage the volume influx and is having high level meetings to find solutions. We are remaining in close contact with CSX corporate.
  • Indianapolis congested due to influx of containers and crew shortages.
  • FEC Network fluid.
  • KCS Network fluid.
  • NS Network fluid.

Air Freight Update

American Airlines Group - The holding company of American Airlines (A1G) (AAL) (AA) announced a $2.4 billion loss in Q3 2020, compared to a $425 million profit it made in 2019. Although the airline kept doing “a remarkable job taking care of the customers,” according to the chairman and chief executive officer (CEO) of American Airlines Doug Parker, the times remain challenging. Parker highlighted the negative financial impact of the crisis, which resulted in the airline posting a two billion loss in the quarter. According to the financial report of Q3 2020, AA’s revenue dropped by 73% to $3.17 billion compared to $11.9 billion in the same period of 2019. The CEO of American Airlines (A1G) (AAL) commented that to preserve cash, the carrier had started an aggressive cost reduction program that resulted in removing up to $17 billion from the airline’s operating and capital expenses budgets for 2020.“We have a long road ahead, and our team remains fully engaged and focused not just on managing through the pandemic but on making sure we are prepared for when demand returns. We are confident that the continued efforts of our team and the actions we have taken will drive customer confidence and strengthen our company for the future,” stated Parker on October 22, 2020. American Airlines (A1G) (AAL) sent more than 150 of its aircraft into early retirement. After removing its Boeing 757s, Boeing 767s, Embraer E190s, Airbus A330-300s, and Bombardier CRJ-200s from the fleet, the airline also decided to retire all of its 15 Airbus A330-200 planes.

ANA - All Nippon Airways (ANA) decided on 21th to cut 25 to 30 large aircraft mainly for long-haul international routes. Including leasing, ANA currently has 59 large planes, which will be reduced by half. Compared with small and medium-sized aircraft, large aircraft have less fuel efficiency and higher maintenance costs, making them the main target under streamlining measures. All Nippon Airways also had to withdraw its plans to expand its routes because of the pandemic. For airlines, aircraft are the main generators of revenue. A reduction in aircraft ownership carries the risk of not coping with passengers' increase when demand for air travel resumes. However, ANA believes it is necessary to completely revise its business plan on the premise that the market will not recover for some time. ANA Holdings (ALNPY), ANA's parent company, will include more relevant details in the business plan report to be released on the 27th. The report is expected to include announcing a loss of about 530 billion yen (USD 5.07 billion) in consolidated net income for fiscal 2020 (April 2020-March 2021). This year's deficit is estimated to be a record high in the group's history. With tens of billions of yen worth of large aircraft, the downward book value became one reason for the enormous losses. The large aircraft to be cut include the Boeing 777, which has up to about 500 seats. Besides finding buyers, such as leasing companies, spare parts' separate sale after dismantling is also being considered, and the storage at off-airport locations. Among small and medium-sized aircraft, less efficient and older aircraft as well are the target for disposal. Though large airplanes can carry more passengers at once, they also cost more in fuel and have higher maintenance costs, so they cannot be profitable if they have low load factors. Under the COVID-19 pandemic, airlines such as ANA have continued to reduce their international flights. Many of their planes are left parking at airports with remained downtime fees, which puts a heavy strain on the airlines' finances.

IAG - International Consolidated Airlines Group (IAG), a holding company of British Airways (BA), reported preliminary financial results for the third quarter of 2020. Due to the COVID-19 related travel restrictions, the company counted that it would suffer a €1.3 billion loss in the third quarter of 2020. IAG announced it was forced to complete further cuts of British Airways capacity. On October 22, 2020, the company published preliminary financial results for the third quarter of the ongoing year. The report showed that the BA owner raised €2.74 billion from shareholders, which boosted the group’s liquidity to a total of €9.3 billion. However, IAG suffered a revenue drop by 83% to €1.2 billion in September 2020, compared to €7.3 billion for the same period in 2019. The decline in revenue led the group to undergo a €1.3 billion operating loss, compared to a profit of €1.4 billion profit in the third quarter of 2019. The owner of British Airways reported that it would complete capacity cuts by reducing flight schedule up to 30% compared to the same period in 2019.IAG explained that further cuts would come from the recent drop in the overall bookings, which “have not developed as previously expected due to additional measures implemented by many European governments in response to the second wave of Covid-19 infections“, announced the group in a report. The company added that an increase in local lockdowns and an extension of quarantine requirements for airline passengers were also notable reasons to cut the BA capacity more. “In response to the high uncertainty of the current environment, IAG now plans for capacity in 4Q 2020 to be no more than 30% compared to 2019. As a result, the Group no longer expects to reach breakeven in terms of Net cash flows from operating activities during 4Q 2020,” in a press release stated IAG.IAG outlined that currently released results were only preliminary data. The group would publish detailed results of the third quarter on October 30, 2020.

Kalitta Air - Will become the first airline to operate Boeing 777-300ERSF converted freighters after signing an agreement with lessor GECAS Cargo. The US cargo airline has signed a deal for three of the B777s, the world’s largest twin-engine freighter, with the aircraft delivered in 2023. The conversion program is jointly funded by GECAS and Israel Aerospace Industries (IAI), with GECAS delivering the prototype aircraft to undergo conversion in June of this year. Kalitta Air currently operates a fleet of more than three dozen cargo planes, including B747-400F, B767-300SF, and B777F. “Providing air express delivery all around the world for virtually any type of freight, the addition of these three 777-300ERSF freighters will help us meet the needs of our customers,” said Conrad Kalitta, owner of Kalitta Air. “We are delighted to continue our 15-year relationship with Kalitta Air and [we are] proud they’ve become the launch customer with the 777-300ERSF freighter for its future air cargo operations,” said Rich Greener, senior vice president and manager cargo of GECAS, adding: “The 777-300ERSF shares an extensive commonality with the production 777-200LRF. That’s a benefit to any operator looking to bring a new type into their fleet.”

Lufthansa Cargo - A wholly-owned subsidiary of Lufthansa Group, released a winter season schedule for its cargo operations. The carrier announced its plans to operate 35 regular Europe-Asia cargo flights per week from October 25, 2020. On October 21, 2020, Lufthansa Cargo announced that in the coming half-year during the winter season, it would continue to serve a bunch of destinations worldwide from its home hub in Frankfurt am Main Airport (FRA). The airline bet on connections among Europe and Asia by scheduling an average of 35 freighter flights per week. The cargo operator stated that in the region of Asia, it would mainly focus on the Chinese metropolis of Shanghai (PVG), the South Korean capital Seoul (ICN), Japan's capital Tokyo (NRT), and the Hong Kong International Airport (HKG). The winter schedule is also focused on several more routes to China's capital Beijing (PEK) and the West Chinese metropolis Chengdu (CTU), as well as some destinations in India, which would include Mumbai (BOM), Hyderabad (HYD), Chennai (MAA), and Bangalore International Airport (BLR), announced Lufthansa Cargo in the press release. According to the statement, the German carrier would also serve such Asian destinations as the Japanese conurbation of Osaka (KIX), the Thai capital Bangkok (BKK), the Vietnamese metropolis Ho Chi Minh City (SGN) as well as the Uzbek capital Tashkent International Airport (TAS). Under the newly formed winter schedule, Lufthansa Cargo would operate freighter flights connecting Europe and North America for a frequency of 34 operations per week. Those particular routes would include Chicago (ORD), New York (JFK), Los Angeles (LAX), Atlanta (ATL), Houston (IAH), Seattle (SEA), and Dallas (DFW) in the United States, Mexico City (MEX) and Guadalajara (GDL) in Mexico, as well as Toronto Pearson International Airport (YYZ) in Canada. The Southwestern Norwegian city of Stavanger (SVG) has also been partially integrated into the North Atlantic route rotation, stated Lufthansa Cargo. The German airline’s freighters would also cover the South Atlantic westbound to connect Frankfurt am Main Airport (FRA) with Campinas (VCP), Curitiba (CWB) and Recife (REC) in Brazil, Buenos Aires (EZE) in Argentina, and Montevideo (MVD) in Uruguay for the frequency of four flights per week.

Singapore Airlines - (SIA1) (SINGY) announced that it would once again return to New York’s John F. Kennedy International Airport (JFK) on November 9, 2020, flying a direct itinerary from its hub, Changi Airport (SIN). The flight will overtake Singapore Airlines (SIA1) (SINGY) flight from Singapore to Newark Liberty International Airport (EWR) as the world’s longest commercial scheduled flight, beating it by a measly four kilometers in distance. The airline will operate the flight with an Airbus A350-900, configured with 42 business, 24 premium economy, and 187 economy class seats. However, the main reason why the flag carrier of Singapore is returning to JFK is cargo. “Operating to JFK International Airport would allow Singapore Airlines (SIA1) (SINGY) to accommodate better a mix of passenger and cargo traffic on its services to New York in the current operating climate,” read the airline’s statement. Also, the non-stop services will be further boosted by the growing amount of transfer passengers at Changi Airport (SIN).

South African - SAA aims to relaunch operations in the first half of 2021 South African Airways (SAA) is expected to restart its operations in the first half of 2021, announced the government of South Africa. The airline is supposed to operate as a joint venture of the public and private sectors. The Department of Public Enterprises (DPE) stated that the government bailout of 10.5 billion rand ($650 million) secured for state-owned SAA should ensure the airline’s restructuring plan's successful development. The relaunch of SAA in the first half of 2021 would support key economic sectors of South Africa, announced the authority in a statement released on October 29, 2020. “The Business Rescue Plan for SAA is fundamental and will create a solid base for the emergence of a competitive, viable, and sustainable national airline,” stated DPE. “The cumulative effect of these actions is that the government will be partnering with the private sector in the launch and management of the new airline and relieving the financial burden from the fiscus,” added the authority. SAA's restructuring plan would contemplate an initial airline's working capital financial injection of 2.8 billion rand ($172 million), of which 800 rand ($49 million) would be used for the payment of SAA's post-commencement creditors. The plan would also include providing un-flown airline tickets worth 3 billion rand ($184 million), pointed DPE in a statement. The announcement of SAA’s relaunch follows the government’s decision to provide the ailing air carrier a 10.5 billion rand ($650 million) financial injection necessary to implement SAA's restructuring plan. Earlier in October 2020, the National Treasury of South Africa presented to Parliament the medium-term budget policy statement (MTBPS). Following the document, Tito Mboweni, the Finance Minister, approved a 10.5 billion rand ($650 million) bailout to SAA. The MTBPS also set an additional financial injection of 6.5 billion rand ($394 million) to settle SAA’s debts and interests. The Finance Minister considered that the ailing airline was the state-owned lag carrier; therefore, the funding should come from its budget. All operations of the state-owned SAA were suspended on September 29, 2020, after previous attempts to restructure the carrier had been met with opposition from both the government and trade unions. The SAA filed for liquidation and bankruptcy protection in December 2019, after 8 years of continuous losses since 2011.

UPS - UPS pilot unions warn that a spike in Covid-19 cases amongst members could impact its performance during peak season. It is believed that more than 100 UPS pilots have recently contracted the virus. Following UPS president Carol Tomé expressing concern about a spike in Covid-19 cases among the company’s pilots during an investor call, Robert Travis, president of the Independent Pilots Association (IPA), has written an open letter suggesting how the situation could be managed. In his letter to Tomé, Travis — who is also a UPS A300 Captain — called for: expanded pilot access to testing (both before and after flights) and improved the assistance of crewmembers who have tested positive for Covid-19 while abroad. “While, at our urging, the company has offered limited testing, what is being offered currently is woefully inadequate and leaves the pilot group exposed to the rampant transmission of the virus while at work,” Travis said in his letter. He also called for more transparency in UPS’s contact tracing (track and trace) efforts. “At a minimum, the company’s actions in this regard lack transparency, and therefore generate no confidence among pilots that UPS is acting in the best interest of their health and safety,” he said. “Has the Company hired an outside vendor to conduct contact tracing as some cases may indicate? Again, management has been unable to confirm or deny this basic fact. “Asian volumes boost UPS in Q3UPS outlines iPhone launch operations names new members of the board of directors Travis concluded the letter by highlighting the critical role that UPS pilots will play when coronavirus vaccines are transported globally. In light of this, he said the company must ensure that pilots' health and safety be prioritized. “Unprecedented times call for unprecedented actions. Update #85

Ground Transportation Operations

  • According to FTR, who uses's data, seasonally adjusted freight activity has moved higher for the third straight week and has now exceeded the prior post-pandemic peak hit in early September. Dry Van: The Dry Van segment has moved higher for three straight weeks. The latest reading is just 0.7% below the peak seen during the week ending September 4. Refrigerated: Temperature-controlled activity rose to a new high since the grocery restocking period. The latest reading is just two-tenths of a point below the restocking peak set during the week ending March 20. Flatbed: The Flatbed segment continued to move higher and reached another post-pandemic high during the week ending October 30.
  • According to DAT Freight and Analytics, 17% fewer spot truck posts this past October compared to 2019, while spot load posts were up 122%. Van spot rates increased 33%, flatbed 13%, and reefer 22%.
  • Imports and truckload tenders have been moving in near lockstep since mid-May as the U.S. crawls out of the pandemic-induced recession. With elevated import volumes forecast to continue into 2021, this could mean trucking may have a stronger opening quarter even after the traditional holiday peak season ends.
  • The lack of drivers is still a significant concern. It’s a multi-fold problem as shuttered training schools and procedural delays at government permitting agencies (DMVs) hurt the supply of drivers able to receive their commercial driver’s licenses (CDLs). At the same time, recovery from the COVID-19 pandemic is expected to create excess freight demand. “We're going to be down probably around 35% new CDL holders compared to last year,” said Don Lefeve, president and CEO of the Commercial Vehicle Training Association (CVTA). “And the recent capacity crunch is likely to extend well into 2021.” An aging driver demographic, the Drug & Alcohol Clearinghouse, low driver school enrollment are the main headwinds limiting recruitment.
  • Intermodal containers and trailers—at 295,110—saw a 9.5% annual gain, coming in ahead of the weeks ending October 17 and October 10, at 291,935 and 289,488, respectively.
  • Preliminary Class 8 truck orders in North America topped 40,000 in October for the first time in two years. Orders were up 26% from September and 83% over last year. New equipment orders for 2021 delivery remain robust. Fleets continue to order Class 8 trucks in large quantities for 2021 delivery. “September was the turning point for the Class 8 market,” said Don Ake, FTR vice president of commercial vehicles. “Fleets became much more confident about future freight demand and began placing large orders to replace older units and for expansion purposes, as capacity tightened. “In just a few months, the industry has gone from fear, to hope, to optimism,” he said. “It appears the industry has sloughed off the uncertainties about the pandemic for now.”
  • Trailer orders in September were the second-highest on record at more than 50,000.
  • According to the Energy Information Administration’s weekly data released Nov. 2, diesel's national average price dropped 1.3 cents to $2.37 a gallon, 69 cents lower than a year ago. The decline, which comes amid tumbling oil prices, is the eighth in the past nine weeks.
    • Outbound Tender Volume Index (OTVI)
      • Up 0.24%% w/w
      • Up 55% y/y
    • Outbound Tender Rejects Index (OTRI)
      • Down 0.25% w/w
      • Currently @ 24.26% (compared to 5.38 last year)
      • Dry Van rejection rate @ 24.17%
      • Refrigerated rejection rate @ 41.41% (falling)
    • Load to Truck Ratios

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