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Container lines announce further service cuts for Q3


Container lines announced further significant service cancellations in early June to take effect from the third quarter (July-September) as ocean freight carriers try to maintain the freight rates they have achieved in recent months, despite the drop in demand due to the coronavirus pandemic. Consulting group Sea-Intelligence said there had


been a sharp increase in the number of service cancellation announcements for the third quarter across the combined major deepsea trades from Asia to Europe and North America. For these trades alone, around 15% more capacity is being removed from the market, according to the recent announcements, taking the total amount of announced blank capacity for this year so far from 3.4 million teu to almost 4 million teu. “It is very clear that the plateau we had reached for


the second quarter has now seen a drastic upwards change,” said Alan Murphy, chief executive, Sea- Intelligence. “This also means that the amount of capacity removed from the market in 2020 is now more than three times larger than the amount of capacity that was removed due to Chinese New Year – principally driven by a sharp increase in blank sailings for the third quarter.” Although some blanked sailings have been reinstated


on certain trades, these had only served to reduce the number of cancellations and “by no means indicate a reversal to normal market status”, Sea-Intelligence said. “The data clearly shows that reinstatement of


capacity cannot in any way be interpreted as a sign of strong demand. That we are now seeing full ships on some trades, and even cargo rolling in ports in Asia, is


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HMRC to survey trade regarding Customs intermediary sector


clearly an indication that too much capacity had been removed, but not an indication of a reversal to norm.” The total of more than 3 million teu cut from the market


in weeks five to 26 this year on the main intercontinental trades is equivalent to between 15% and 20% of capacity during the equivalent period of 2019. Good capacity management has served carriers well


during this year’s crisis in terms of maintaining and even increasing freight rates. The World Container Index assessed by Drewry, a composite of container freight rates on eight major routes to and from the US, Europe and Asia, is currently around 22% higher than a year ago, with Shanghai-Rotterdam prices up around 16% in the first week of June compared with a year earlier. And according to Freightos, China-US West Coast


rates are around 32% higher than a year ago, with China-US East Coast prices roughly level with those of a year earlier.


The industry has cautiously welcomed news that the UK’s Manston Airport in Kent has been given the go-ahead to become an international air freight hub, with cargo services set to begin in the first quarter of 2023. RiverOak Strategic Partners


Manston Airport freight hub gets green light There has been much doubt over


(RSP), which has eyed the airport since it closed in 2014 and acquired it last year, has won the development consent order it had been aiming for after government ministers overruled the planning inspectorate’s recommendation to reject the scheme. RSP has pledged to spend £300 million rebuilding the airport, with construction due to start next year.


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the viability of the airport as a cargo hub, as without much in the way of passenger operations there would be little link between belly and freighter cargo. The main freight hubs are in the centre of the UK and are well-served by airports such as East Midlands. Analysts have questioned


whether there would be sufficient services to keep Manston operational. It closed in 2014 with very few services and it is not clear what has changed – except Brexit. RSP said: “As the global


economy starts to re-energise and the UK, separated from the EU, negotiates trade deals around the


Ipsos MORI is conducting a survey on behalf of HM Revenue and Customs (HMRC) to help it better understand the size, structure and capacity of businesses involved with overseas trade, specifically those who currently deal with or plan to deal with customs processes once full customs declarations are required for all EU trade. HMRC will use the findings to


understand how capacity is changing over time in response to ongoing EU Exit negotiations, and what businesses need from government in order to prepare for when full customs declarations are required on all EU trade. The survey will ask about the


different types of customs declarations you currently complete (if you do) and whether you have taken any steps to prepare for a situation where full customs declarations are required.


world, Manston will be in a position to address this gap in the UK’s trading infrastructure, providing dedicated air freight capacity adjacent to the London airports system, free of the uncertainties that face airports [that are] reliant solely, or predominantly, on the income from passenger traffic. “Once built, Manston will be able


to cater for traditional freight as well as the rapidly expanding international e-commerce sector that the UK has so heavily relied upon during the period of lockdown.” RSP claims the airport will


generate 23,000 jobs in the region by 2043.


HMRC is also interested in the impact of coronavirus on your preparations and your business more widely; HMRC understands this is a difficult time for a lot of businesses and wants to reassure you that the questions will be relevant to you. The research is being conducted by Ipsos MORI, an independent research organisation, on behalf of HMRC. It involves taking part in a 20- minute interview which will be scheduled to take place by telephone with an Ipsos MORI interviewer at a date and time that is convenient for you, between 21 July and 1 September. If you are interested in taking part, or have any questions, please email Ipsos MORI on CustomsResearch@ipsos.com


August 2020


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