What We're Reading: BDP Trendwatch Week 25

Tensions ease between US, China over airline flights

Chinese airlines can continue operating four scheduled passenger flights per week to the U.S. after the Department of Transportation on Monday lifted earlier restrictions on air access over a dispute with China about treatment of U.S. airlines

The DOT modified a June 5 order limiting Chinese carriers to a total of two weekly flights after the Civil Aviation Authority of China (CAAC) granted operating permissions to Delta Air Lines and United Airlines to each operate two weekly flights to China.

The order primarily affects the four Chinese carriers – Air China, China Eastern, China Southern and Xiamen Airlines – that are currently providing air service to the U.S. It’s a positive development for cargo shippers because it ensures belly space for freight at existing levels during a period of scarce cargo capacity and paves the way for more flights as travel demand increases.

Source: Freight Waves


U.K. and EU see Brexit deal a step closer after Johnson call

The U.K. and European Union moved a step closer to reaching a deal over their future relationship, with the bloc’s top officials confident Boris Johnson is willing to compromise and the prime minister saying the prospects for an accord are “very good.”

An hour-long video call on Monday between Johnson and the bloc’s leadership has injected fresh momentum into the deadlocked negotiations, according to people on both sides with knowledge of the conversation. The EU inferred from Johnson’s contributions that he is willing to soften his position and European officials told him they are ready to do the same.

Source: AJOT


EU says cargo can't fly in cabin with passengers – or can it?

Cargo and passengers will not be allowed to travel in aircraft cabins at the same time, according to new EU Aviation Safety Agency (EASA) guidelines.

But the rules for national authorities, released last week, appear to give airlines ‘carte blanche’ for eight months, and have been condemned for being vague.

While the rules repeat that “the passenger cabin is not approved as a cargo compartment”, it adds that “an exemption … is needed”.

The period of exemption, the rules say, should refer to “the duration of the Covid-19 outbreak in the member state, but in any case should be less than eight months”.

Source: The Loadstar


Cargo the bright spot for airlines as revenues expected to soar

Air cargo is expected to be the “bright spot” for airlines in 2020 as revenues are forecast to hit near-record levels, according to the latest IATA market outlook.

The airline association said that cargo volumes will decline by 16.8% this year to 51m tonnes, but a severe shortage in cargo capacity due to the unavailability of belly cargo on (grounded) passenger aircraft is expected to push rates up by some 30% for the year. 

As a result, IATA predicts that cargo revenues will reach a near-record $110.8bn in 2020, up from $102.4bn in 2019. As a portion of industry revenues, cargo will contribute approximately 26%, up from 12% in 2019.

Source: Air Cargo News 


May Cass Freight Index shows minimal signs of improvement

With minimal improvement off of dismal April readings, which were viewed as “recessionary,” the May edition of the Cass Freight Index, from Cass Information Systems, showed that the impact of the ongoing COVID-19 pandemic on freight transportation shipments and expenditures remains intact.

Many freight transportation and logistics executives and analysts consider the Cass Freight Index to be the most accurate barometer of freight volumes and market conditions, with many analysts noting that the Cass Freight Index sometimes leads the American Trucking Associations (ATA) tonnage index at turning points, which lends to the value of the Cass Freight Index.

Source: Supply Chain 24/7


EU challenges China’s trade expansion with landmark tariff

The European Union fired a warning shot at China over its global trade ambitions with an unprecedented tariff decision to counter Chinese subsidies to exporters.

For the first time, the EU on Monday took aim at alleged market-distorting aid granted by a country to exporters located in another state. To date, such European duties have focused only on subsidies provided by the country where the exporters are based.

“It’s a landmark case that could lead to many more similar ones,” said Agatha Kratz, an associate director at Rhodium Group who leads research on EU-China relations and Chinese commercial diplomacy. “Chinese state support is in fact found widely beyond China’s borders, with distortive effects on EU and other foreign stakeholders.

Source: AJOT


PSA and One Network solutions team up to provide supply chain visibility

Port operator PSA International’s supply chain operation has teamed up with US technology provider One Network Enterprises.

It will offer shippers and 3PLs that use its port facilities “track-and-trace visibility, alerts and notifications and a comprehensive supply chain control tower” for logistics activities beyond terminal gates.

PSA Cargo Solutions said One Network’s NEO platform would “augment” PSA’s Calista platform across many of its global network of ports and handle “thousands of bookings per month over nearly 100 global transport lanes across Asia and the EU”.

Source: The Loadstar