Panama Canal Almost Kills Air Freight Industry in the Region

Panama Canal growth flooded the air industry and shifted cargo from air to sea

Air cargo industry in Panama is facing some serious falls in demand of cargo and the Panama Canal stands responsible for this fall in demand. The air cargo industry said that the Panama Canal has pushed the cargo on sea routes from air cargo in the region. It is not the end of this story yet, experts said that this trend is expected to continue as the transportation route is expanded.

What Operators said?

At the air and sea cargo conference in Miami, the cargo director of Copa Air has said that the number of ships passes through the canal route had increased over last few years and left a knock on effect on them (the air cargo industry). 

What else he said?

He further said that the panama route has more and more activity on the sea cargo side, sine in the air freight sector, there is more and more decrease and freight being shipped by sea.

There are more ships coming to panama ports and more frequently collecting the cargo while cargo flights are decreasing with every passing day. 

What is the future?

According to the experts, it is worse and will be even worse by next year, when the number of containers will be increased after the expansion project will be completed. The canal then will be able to allow larger vessels to pass through it. 

One of the experts said that the activity on the Panama Canal is increasing and will continue to grow as it is expected and trends are showing.

DHL expects something else

The chief executive of DHL global forwarding, said that the shippers had been stop using the west coast ports of USA after the industrial action of preceding year which will be very beneficial for the air industry and the truckers. Both parties can get benefits by this action.

He further explained the situation by referring to the trade barriers which had increased in recent years in Latin America and other areas of the continent. He said that, these factors are affecting the air cargo industry very badly and shifting the cargo on sea routes.

Asia-Europe Freight Shipping Rates In The Gyre

Asia-Europe shipping rates of freight services continued reporting declines from 15-weeks – due to volume declines

CARGO SHIP

The spot rates of freight services continuously decreasing since 15 weeks, due to decline in volume. Due to this downfall in volumes, the revenue of the freight companies is greatly affected. it is a situation of high and dry for the freight carrier services to down the revenue back again. the major reason of the declination of spot rates was the drop of the head haul volumes. on the other hand, china’s golden week holiday put a strong impression on trades and shows continuous fall. after golden week holiday of china, carriers start freight services from shanghai containerized freight index described more drop on two major trades of scfi. 

The spot rates of cargo services between north europe and shanghai cut down by 54 dollars this week, reporting 259 dollars per teu as a final value. this year reported the least spot rate as compared to the all decreased values spot rates. on the other hand, mediterranean port’s spot rates also decreased by 69 dollars, reporting 224 dollars per teu as a final value.

SHANGHAI EXCHANGE

in spite of succeeding healthy fundamentals of the market, the spot rates of freight services belonging to transpacific also continued fall. the spot rates cut down to 94 dollars and 119 dollars towards the west and east coasts of us. it is told that the spot rates went low and reaching 1,197 dollars per 40 feet for pacific coast and stated 2,199 dollars per 40 feet for the atlantic.

From these statics  it is very much clear that the latest gri planned by asia-europe carrier companies in september have no effect on the spot rates of freight services. it is seen that the gris of 1000 dollars, driving the spot rates to rise for about two weeks at the start of the month, before showing the loss of gains and more while the rest of the month. from this information, carrier companies have planned to throw more gris in a range of 950 dollars to 1,200 dollars per teu, in between north europe and asia, which may come into result from november 1st, 2015. 

CARGO SHIP

it is estimated that the new gri offers would rise the spot rates of cargo rates, which likened with the full world, would lead to 500 percent increase in spot rates.the present condition of trades of asia-europe shipping rates shows that there will be a continuance in it, mostly in between geneva and copenhagen at least for some future weeks.

Airline Demand falls after slowdown

DELTA AIRLINE

Air freight at west coast ports suffered from a slowdown and unfortunately it has still not fully recovered. According to Delta air lines Inc. there was a 20% decrease in revenue which indicates that U.S handlers are finding the prices harsh and in turn this seems to be causing the decrease. The strike of the west coast port has ended yet the effects remain on the cargo airlines. 

Statistics have been provided to further emphasize the decrease and tough effect of the slowdown on the air line. Last year Delta’s cargo revenue was $244 million yet from the quarter to September it had dropped to $196 million, decreasing by a 10% fall in three months.

Ed Bastian, the president of Delta stated that the cargo business and passenger business are going through the same issue. Domestic and local seems safe and steady while internationally, it’s decreasing.

PASSENGERS

Although the airlines went through a high in business early in the year while all the port disruptions went on, it seems that the boost only lasted up till summer. Trade groups report the increase slowly trailed off leaving a lower revenue then before the west coast port disruptions.

When it comes to domestic Cargo then the airline does succeed others yet in regards to freight volume it falls behind. Freight volume leaders are United Continental Holdings Inc. as well as American Airlines Group Inc. after these two comes this airline which is based in Atlanta. 

Although more of Deltas running system is based on Trans – Atlantic routes rather than pacific trade lanes statistics show that united and American faced less declines then Delta. 

US AIRLINES

Out of all the U.S airlines the first to have third quarter income has been Delta. With cargo becoming less essential handlers are looking for other opportunities and investments to make up for the loss they seem to be suffering and the decrease in what is the core of the cargo industry, the passenger business.

Looking at the statistics it’s important that Delta take progressive steps to avoid a further fall in revenues. 2007 had reached a peak of $1.7 billion yet last year’s cargo revenues totaled a mere $934 million. This has been a significant blow to Delta and the financial crisis and west coast port disruptions, strike and slowdown seems to have had its effect on the financial earnings and cargo revenues of this particular airline quite heavily.

What on Earth is happening at UPS?

                                   UPS predicts a 5% rise in Air Cargo

UPS AIR CARGO

The costs of air cargo and ground cargo has been raised by about 5 per cent when it was previously declining. The UPS will show us an increase. An Atlanta based company will be raising rates by about 5 per cent and road delivery costs as well as air cargo globally will also rise by 5 per cent more or less. For reliable and cost effective air cargo services to caribbean contact with www.cargotocaribbean.co.uk 

These rates need to be increased according to some, in order to cover labour charges and the cost of equipment as well as receiving a good enough reward for what it provides. Though customers will see the rate slightly higher than average it doesn’t look any more likely to decrease.

GRAPH BAR

This is not the only areas where increase will be seen in the industry. UPS also intends to charge more for fuel and depending on the type of delivery prices will increase. Heavy packages will now cost more and the fuel price will go from 4.75 per cent to 5.25 per cent. The cost of air cargo and global packages will increase by 1.5 per cent.

Normally costs of fuel change monthly and are related to the prices of diesel and airline fuel. This means that with lower prices the UPS revenue suffers and the low fuel prices means that the cost of the company drops and although it has increased revenue it’s not always suited to UPS.

ROAD SERVICES

From January to June 2015 revenue shot up to $2.26 billion which meant there was a 65% increase over just a year. Last year results suffered a loss as health plan costs meant $665 million had to be paid out.

Company shares have increased by 94 cents reaching $103.80.  This has decreased by about 7 per cent in 2015 with the previous year’s showing a 20 cents growth.

Asia-Europe Freight Shipping Rates In The Gyre

Asia-Europe shipping rates of freight services continued reporting declines from 15-weeks – due to volume declines

cargo ship

The spot rates of freight services continuously decreasing since 15 weeks, due to decline in volume. Due to this downfall in volumes, the revenue of the freight companies is greatly affected. it is a situation of high and dry for the freight carrier services to down the revenue back again. the major reason of the declination of spot rates was the drop of the head haul volumes. on the other hand, china’s golden week holiday put a strong impression on trades and shows continuous fall. after golden week holiday of china, carriers start freight services from shanghai containerized freight index described more drop on two major trades of scfi.

The spot rates of cargo services between north europe and shanghai cut down by 54 dollars this week, reporting 259 dollars per teu as a final value. this year reported the least spot rate as compared to the all decreased values spot rates. on the other hand, mediterranean port’s spot rates also decreased by 69 dollars, reporting 224 dollars per teu as a final value.

graph bar

In spite of succeeding healthy fundamentals of the market, the spot rates of freight services belonging to transpacific also continued fall. the spot rates cut down to 94 dollars and 119 dollars towards the west and east coasts of us. it is told that the spot rates went low and reaching 1,197 dollars per 40 feet for pacific coast and stated 2,199 dollars per 40 feet for the atlantic.

From these statics  it is very much clear that the latest gri planned by asia-europe carrier companies in september have no effect on the spot rates of freight services. it is seen that the gris of 1000 dollars, driving the spot rates to rise for about two weeks at the start of the month, before showing the loss of gains and more while the rest of the month. from this information, carrier companies have planned to throw more gris in a range of 950 dollars to 1,200 dollars per teu, in between north europe and asia, which may come into result from november 1st, 2015.

europe to asia

It is estimated that the new gri offers would rise the spot rates of cargo rates, which likened with the full world, would lead to 500 percent increase in spot rates.the present condition of trades of asia-europe shipping rates shows that there will be a continuance in it, mostly in between geneva and copenhagen at least for some future weeks. For cheap sea cargo services to Pakistan, Astarcargo.co.uk is a best and reliable company for sea cargo to Pakistan.