OUTLOOK 2021\\\ >> 16


air lin e s outperformed


their peers globally, said an IATA report, benefitting “from an earlier recovery in the U.S. domestic market.” Air carrier performance is


expected improve in 2021, led by cargo’s strong performance. IATA expects cargo revenues will increase by 18.8% over 2020 and 36.5% over 2019, and that the industry will turn cash-positive in the fourth quarter of 2021. Cargo volumes will revert to 2019 levels, according to IATA, while the continued capacity crunch and the handling of high-priority COVID vaccines and other temperature- sensitive cargoes will boost carrier yields.


Ocean carriers


Cancelled ocean sailings were a mainstay of the COVID economy last year, but that situation is turning around. Data from eeSea, a Copenhagen-based maritime intelligence company, indicates that, on the three main east/west liner trades, 1.7% of February and 0.6% of March 2021 voyages have been cancelled—a lot less that


February’s up by 34%, and March’s up by 17%. “Carriers are snapping


up any available charter tonnage,” said Sundboell. “There is no idle capacity left.” Drewry is positive on


carrier earnings in 2021, and some carriers—such as Maersk, which saw an 82% increase in net income in the third quarter—already profited handsomely in 2020. The Israel-based carrier Zim launched a mid-January initial public offering on the New York Stock Exchange, on the strength of


its $157.8 million


net income for the nine months ending September 30, 2020—exponentially better than the $14.3 million loss the year before. Transpacific contract rates


for 2021 were quoted at 60% higher than 2020 rates during negotiations late last year, according to Drewry, and spot rates are expected to continue to be “very high.” Armed with a bullish


outlook, carriers are moving to expand their operational footprints. HMM—which returned to profitability in the second quarter of 2020— introduced twelve 24,000- TEU containerships to its fleet


Issue 1 2021 - FBJNA


strongest increase in 40-foot demand,” starting in 2020’s third quarter, “following one of the strongest decreases in demand ever.”


Rail


The nation and the new Biden administration face some formidable challenges, noted Ian Jefferies, president and CEO of the Association of American Railroads. “Freight


Saia, Inc.’s less-than- truckload data toward the end of last year highlighted 2020’s second-half freight recovery. (Saia photo)


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railroads want to be and must be part of the solution,” he said, adding that President Biden “is no stranger to U.S. railroads.” North American Class


I railroads ann o un c ed


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MSC enhanced its connections between Asia and the U.S. west coast late last year. (MSC photo)


the 19.9% and 9.4% of sailings cancelled last year. Blank sailings were used by


carriers to manage capacity during the worst of the crisis, but these are now “being blamed for the unanticipated increase in freight rates and significant delays across the supply chain,” noted Simon Sundboell, eeSea’s CEO. But ocean capacity is increasing this year, with eeSea data showing January’s capacity up by 7.6% over 2020,


during 2020’s fourth quarter, all of which were fully laden on their maiden voyages. MSC enhanced its connections between Asia and the U.S. west coast late last year, as did CMA CGM. The downside of such


rapid expansion is the short supply of empty 40-foot containers. Nico Hecker, director of container logistics at Hapag-Lloyd, described the situation as “a black swan,” as the carrier experienced “the


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