Supply Chain Industry Insights
February 2023
Welcome to the PGL Industry Insights report for February, 2023.
Continuing effects of the global pandemic present themselves as businesses came to rely on airfreight during the pandemic as a way to circumvent lengthy delays caused by port congestion. Now, with ocean congestion clearing, demand for pricier air cargo services has declined. Simultaneously, new vessels are being added to ocean fleets, further complicating things in a time where trade growth is softening.
In China, while trade is opening up following the easing of the “Zero Covid” policy, China is now facing a sluggish market with weak demand and heightened competition from overseas as companies around the globe have explored alternatives such as Vietnam, Mexico and others.
China’s exports fell by 9.9 percent in December compared to the previous December, with some analysts warning that shipments could continue to contract until the middle of the year.
Cathay Pacific Cargo and the Cathay Pacific Cargo Terminal have become the first carrier and first cargo terminal operator to have cargo shipments accepted in Dongguan and transported to Hong Kong International Airport by ship for outbound airfreight. This enables full upstream sea-air intermodal export cargo handling between the Greater Bay Area and Hong Kong.
Turkey’s Iskenderun port was closed for four days due to fire following the devastating string of earthquakes.
In the U.S., talks for a new labor pact between West Coast dockworkers and their employers have stretched into a 10th month. With no agreement in sight & volumes dropping, patience is wearing thin.
The International Air Transport Association said last week that air shipment traffic slid 8% last year from record highs in 2021 and was 1.6% less than in 2019, a relatively weak year for the cargo sector. It predicted air cargo volumes will fall further this year to 5.6% below 2019 levels. Global cargo capacity increased 11% last month from a year ago and is now only 2% below 2019 levels.
We in the shipping and logistics industry continue to live in interesting times, and we’ll be here to bring you peace of mind, 24/7/365.
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