|AIR FREIGHT PRICING TREND CHINA TO EUROPE, CHINA TO US YOY
|This crisis has of course a strong impact on pricing to/from China, from Hong Kong and to/from USA/Europe, HERE.
Source: The TAC Index, published 1 June 2020
The easing of lockdowns, especially across much of Europe, has helped demand for container freight gradually get back on its feet to take the first tentative steps toward recovery.After a few months in which demand tumbled around the world, the re-opening of some shops, with more expected in the coming weeks, has resulted in a sudden jump in demand, especially as there are large numbers of vessels out of the market following the void sailing measures by carriers.However, there are some concerns emerging on the Asia-Europe tradelane over a gap starting to grow in prices offered for container freight.Some carriers have reduced rates in an attempt to boost cargo numbers, and this has created a dilemma. The lower rates have attracted more cargo, which has left some vessels at over 100% capacity with some cargo rolled. This has put already fragile supply chains under further pressure.On top of this, looking beyond the short-term boost from easing of lockdown restrictions, are the tremors of an economic slump that all but the most bullish analysts are bracing for.This could have a significant impact on container freight should consumer demand change.
Apparel factories in Bangladesh are still running at half-capacity after orders dried up, and bosses remain pessimistic about the likelihood of new orders any time soon. Amid the impact of the Covid-19 pandemic, factories which laid-off part of their operations are struggling to make a full comeback, leaving hundreds of workers jobless. And this week several more factories terminated hundreds of workers, as they are not receiving enough orders from western buyers. President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Dr Rubana Huq told The Loadstar only 50% of normally expected orders were coming in nowand she is not expecting a return to full capacity soon.
Source, The Loadstar, 3 June
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GEODIS Management Team