Spotlight
Air cargo ascending to record peak season
The air cargo industry is flying headlong into its strongest ever peak season as booming e-commerce demand will combine with online shopping promotions this fall plus rising volume of more traditional air freight , executives outlined at the EU Cross-Border e-Commerce Forum at Liege Airport , Belgium , on Sept 11 . At the same time , the industry is facing a worsening supply-demand imbalance that will place severe constraints on available capacity and add pricing pressure to already elevated rate levels .
“ Brace for impact ,” was the blunt warning to shippers and forwarders from Peter Scholten , Chief Commercial Officer of freighter operator Air One Aviation . “ We are heading for the highest peak season in history .” The global air cargo market has seen eight straight months of double-digit growth as of August , with a 14 % increase in demand and only 7 % capacity growth over that period , said Ryan Keyrouse , CEO of market intelligence consultancy Rotate . With 2024 volumes expected to exhibit an 11 % to 12 % year-over-year rise , Keyrouse further expansion of 2 % to 7 % in 2025 , with high demand taking the air freight industry deep into “ unchartered territory .” “ If e-commerce growth continues aggressively , we are going to be in an unprecedented state ,” he said . It will be “ the highest two-year growth average we ’ ve had in recent decades .”
While the demand has enabled freighter operators to benefit from rising rate levels , the robust market growth is being constrained by a lack of capacity .
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Details of new alliance landscape emerge
The networks of the new container shipping alliances and Mediterranean Shipping Co . are coming into view . Ports in Asia are among the winners , regaining direct calls on several services , in the Gemini Cooperation ’ s updated service network released Sept 10 that offers shippers alternative routings via the Cape of Good Hope and the Suez Canal . South Korea ’ s Busan and Vung Tau in southern Vietnam are the main beneficiaries in the new schedules of the network operated by Maersk and Hapag-Lloyd , having won back hub status after being relegated to largely feeder ports when Gemini released its initial network last January . The revised Gemini network came a day after it was announced that with Hapag-Lloyd leaving THE Alliance , the major vessel-sharing agreement between HMM , Ocean Network Express ( ONE ), and Yang Ming has been rebranded as the Premiere Alliance
The trio are teaming up with Mediterranean Shipping
Co . as a slot charter partner . The slot exchange provides Suez and southern Africa routings , but is focused on direct port-to-port calls instead of Gemini ’ s hub-and-spoke approach . The slot-sharing agreements show MSC has lost no time using the huge scale it has built up in the past few years , ordering more than 2 million TEUs of newbuilding capacity and acquiring nearly 400 secondhand ships . MSC also confirmed that it would remain largely independent when Maersk departs their 2M tie-up . In anticipation of Gemini , ONE also has announced new services out of India and other markets in Asia over the last two months . ONE has had several vessel-sharing arrangements with Hapag-Lloyd on major trade lanes , particularly out of India .
FMC to allow Gemini alliance
The US Federal Maritime Commission ( FMC ) has signed off on the Maersk / Hapag-Lloyd vessel-sharing alliance that will start early next year , but the agency ’ s chief warned the ocean carriers they will be watched for how they treat US shippers . The FMC said Sept 9 it will not seek to block Gemini , Maersk and Hapag-Lloyd ’ s new vessel-sharing agreement for trades between the US , Asia , Europe and the Middle East , allowing the agreement to go into immediate effect after its filing with
the FMC . Gemini ’ s actual services are set to debut in February 2025 . The FMC asked the two companies in July to provide extra details about how Gemini would work due to concerns about the anti-competitive effect of the second- and fifth-largest ocean carriers by capacity pooling their vessels . While it found no anti-competitive issues , the FMC said Gemini “ will be subject to extensive commission monitoring .”
Retaliation ruling against Hamburg Sud holds
The US Federal Maritime Commission ( FMC ) has upheld a judgment that said Maersk ’ s Hamburg Sud subsidiary unfairly denied a US furniture importer space on container ships during the pandemic , determining that the carrier ’ s actions went beyond a regular contract dispute to violate US shipping law . In an order published Aug 27 , the FMC unanimously turned down Hamburg Sud ’ s appeal of an administrative law judge ’ s 2023 ruling that the carrier retaliated and refused to deal with Florida-based OJ Commerce ( OJC ) during the 2021 contract year . OJC threatened to file a complaint about Hamburg Sud with the agency after the carrier said it could not meet the company ’ s minimum quantity commitment ( MQC ) under its 2020 service contract . Along with
6 Journal of Commerce | September 23 , 2024 www . joc . com