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OPERATIONS: |
International
Status: YELLOW
- Air Freight
- Cargo is following a fairly typical recession recovery cycle. IATA’s chief economist, Brian Pearce, gave a market update and explained that cargo volumes were hit much less than the passenger business. He quotes, “If we look at what’s happened by trade lane, interestingly this huge variation from the North Pacific market is showing volumes higher than where they were last year versus the North Atlantic where volumes are 30% down.”
- Korean Air has begun cargo operations with a freight-optimized Boeing 777-300ER, after it received regulatory approval to modify the popular widebody. The aircraft operated its first cargo flight on the 8th of September, from Seoul Incheon to Columbus, Ohio in the US. Korean Air is meeting the demand for items such as automobile parts, electronic devices, and garments.
- E-commerce giant Amazon has contracted ATSG subsidiary Airborne Global Solutions to operate six of its B767-300 freighters. This commitment from Amazon applies to the first six of the twelve B767 freighters that Amazon agreed in May to lease from ATSG’s Cargo Aircraft Management (CAM) subsidiary by the end of 2021, each lease having a ten year term.
- Amid the continuing demand for freighter capacity, Taiwan-based China Airlines will keep the three 747-400Fs it had been remarketing for longer than originally planned.
- After just over a year of operating a freighter fleet comprised of five 777Fs, Taiwan-based EVA Air is again growing its freighter fleet and will place orders for three additional 777Fs from Boeing. In response to changes of market demands and continuous optimization of the network and fleet, the board of directors approved the adjustment of some aircraft that have not delivered.
- Demand in China was slower than forecasted last week and into this week as Apple’s product launch was slightly delayed and there was excess capacity in the market. This is a short-term blip before the market is expected to gain strength hitting a mini-peak ahead of the Golden Week holidays in early October and then continuing with strong demand and very tight capacity post-Golden Week.
- Airfreight market from North America maintains its status quo without significant change week over week going into Europe or Asia.
- Ocean Freight
- Record high trans-Pacific spot rates and container-equipment shortfalls in Asia have now caught the eye of powerful government regulators. The China Ministry of Transportation and Communication questioned liner reps in a special meeting last Friday. In the aftermath of that sit-down, concerns have been raised about carrier’s ability to implement general rate increases (GRIs) and “blank” (cancel) sailings while averting future government backlash.
- Following on the Chinese Central Governments lead, the US Federal Maritime Commission (FMC) said it is closely monitoring capacity and pricing conditions in the eastbound trans-Pacific, but is not yet ready to launch a fact finding investigation or petition for legal action. Last week, Chinese shipping regulators flexed their muscles summoning all carriers to Shanghai to review pricing and blank sailing policies.
- Ports across the country, including the California ports in Los Angeles, Long Beach and Oakland, as well as the Port of Virginia, experienced import volume in August that was higher than the same month last year, as retailers prepare for the holiday season and refill inventory after decreasing procurement in the early stages of the pandemic.
- Maersk and Canadian Pacific will build and operate a transload and distribution facility in Vancouver, British Columbia, according to an announcement Tuesday. It is slated to be operational in 2021.
- Canadian Pacific will shuttle containers to and from port terminals, taking the reliance off of trucks. Because the facility will be an expansion of Canadian Pacific's intermodal center, the rail infrastructure is already in place.
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Domestic
Status: YELLOW
- Hurricane relief efforts continue to intensify the crunch on capacity as companies rush to provide relief to the Gulf Coast and parts of Florida. Tropical Storm Beta has become a tropical storm and will meander in the western Gulf of Mexico before potentially impacting parts of the coast of Texas next week. This will continue to impact an already volatile truckload spot market. High demand and limited capacities are driving TL rates to record highs. We can forecast very lean capacities and increasing demand in the next few weeks as we head into the end of Q3.
- The recurring theme of LAX shortages is no different this week as both EUVs and LTL carriers are having trouble finding trucks out of California.
- Wildfires continue to be a problem in California, making the shortage even more pronounced.
- Spot rates around the country to climb as shortages in trucks continue. Despite the economy adding more and more jobs, there is still a lack of drivers getting hired or re-hired. The high volatility of the market when COVID started forced drivers to be laid off and start looking for work in other industries. Now, the concern is that the initially laid off workforce will not be interested in returning to the industry.
- Some markets are seeing as many as 1 in 4 trucks being rejected in preference of the more desperate shippers.
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IT :
Status: GREEN
- The current challenges in the business environment create the perfect opportunity for learning. Pegasus strives to have a culture of continuous improvement which has led us to go through our Business Continuity Plan (BCP) and improve our plan. Click the link below to read our article on what makes the Pegasus BCP exceptional.
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STATUS KEY:
Red: Selective lanes not moving, driver/labor shortages, regulatory shut downs, geographic hotspots, border closures
Yellow: Freight is moving with less capacity, increased expense, reduced handling, with potential risk of future unknowns
Green: Freight is moving with no abnormalities |
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For questions, please email C19TaskForce@pegasuslogistics.com |
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