People have been trading goods for centuries now. Because of the ever-evolving industry and globalization, the need for a freight market was created. A lot of changes happened in this market over the years. But the one we felt the most was the result of the Covid- 19 pandemic. Many moving companies, Four Winds Saudi Arabia included, had to adapt to the new environment. After more than one year since the virus outbreak, the whole world is still trying to recover. There are positive trends in the first half of 2021. which are displayed in this June freight market update.
January – June 2021 market update
To be able to understand the changes that are happening now, in June, we have to take a look at the first half of 2021. Because of the continuous lockdown and travel restrictions due to the pandemic, the gradual improvement turned into a strong recovery. High tech was the most sought-after goods, second were flowers for the celebration of Mothers Day in May. Worldwide demand after PC components grew by an incredible 32% this year. That makes it the fastest increase in two decades.
Everyday life and activities are slowly going back to normal, with the ease of Covid – 19 restrictions. Taking that into consideration, there is an emphasis on service-related purchases. Some restrictions are still there, so the process will take some time. The freight market in June continues to show growth tendencies in the summer months, bigger by 23 – 33 percent compared to previous years.
Freight market update June 2021
Demand outgrows available capacity. The amount of vessels for transporting is insufficient, but the bigger problem is the crowded and congested ports that cause delays in shipping. Because of this, the efforts of the carriers to keep the goods moving are mostly in vain. There was a new virus outbreak recently in Vietnam, because of that the restrictions on economic activity are back in force in that area. For example, in Malaysia, the import market is functioning without major obstacles, while the export market faces challenges mostly because of equipment shortages in the freight market until the end of June. Many logistic services were put on hold, creating a degree of confusion. But the entire situation is showing signs of returning back to something resembling normalcy.
The Philipines are still under Covid – 19 restrictions. The Schedule of vessels is delayed and is causing port congestion, same as customs delays at the Manila port. To make things worse, reporters informed about a major fire at the access road to this port.
The government has extended the emergency period until the end of July in Indonesia. The positive side here is that the ocean freight market update in June 2021 for this part of the world says that ocean shipments are operational, but with severe equipment shortages.
The freight market is functioning quite normally, considering the current situation. Breakouts were reported at the Shenzen port. Because of this, a decent number of carriers are swapping for other nearby ports. The Yantian port is experiencing congestions because of this. Land and air shipments are running as smoothly as possible right now. Professionals forecast that this situation will persist until the end of June.
The pandemic drastically diminished the amount of output in this country. India could be considered a bit different compared to other countries since the space isn’t full, but there are many cancelations. The freight market update June claims that the transactions are slow, but the rates maintain their strength. Considering there are more profitable trade routes, like the Pacific, for example, carriers will probably hesitate to do any business with India soon. Airfreight forwarding flights are working with limited capacity. Transportation by land is functioning fairly normal for now, the only obstacle is state laws. But there are no changes speculated for the coming months.
The Middle East freight market is expected to grow from USD 21.46 billion in 2020 to USD 32.12 billion in 2026. In the time of the pandemic, the purchasing behavior of the inhabitants changed. From going to local markets, it shifted towards online shopping, mostly for basic everyday items like groceries. Logistics players will have a lot more competition to deal with. Increasing the quality of their services is a must if they want to stay relevant in the freight market. Efforts are also put into adopting new technologies to ease the functioning of logistic companies in the Middle East. Over the next five years, the opportunities in Saudi Arabia look promising. This is due to:
- the policies shifting in favor of a more open economy
- change of the government
- investment in new equipment
- implementing new technologies to stay up to date with the freight market update
Distribution of the Covid – 19 vaccine
In February, there was a massive demand for the newly available vaccines. The biggest customers were and still are Africa, Latin America, and Southeast Asia. Nevertheless, vaccine movement is highly unlikely to affect the already loaded capacities. A limited number of airlines already have specially equipped aircraft for vaccine distribution. The urgency of the current situation has set the rules. For that reason, air freight forwarding is number one when it comes to dispensing this type of immunization. Given some time, ocean freight will also become a way to distribute the doses.
June air freight market update
Renewed quarantine measures in a vast amount of countries have led to people canceling long intercontinental flights. The moment when international travel will go back to normal is still unknown. Reservation is down -30% in June 2021 compared to pre-pandemic June. Capacity is also deeply affected and down by -60% vs pre-pandemic times. The variety and strictness of lockdown measures in EU countries, affected trade so immensely that the Trans – Atlantic’s trade lane capacity is the most affected.
Sea freight update June
Maritime transport – the main feature is rising prices. The industry of shipping containers remained under strong pressure in June, like in the first half of 2021. Therefore, the prices are high-ranking. Official data depicts a 199% increase in prices compared to the first quarter of 2020. To make the already strained situation worse, a container ship blocked the Suez Canal for 6 days in March. 450 ships were blocked, disrupting the ocean freight to Saudi Arabia further. The Suez Canal is an important gateway that connects Europe and the Middle East (aka. Saudi Arabia as an important player in the freight forwarding game).
June freight market update concludes that the current global situation has positive tendencies. Taking into consideration the current state we are in as a population, the crisis is steadily subsiding. The freight forwarding market is still functional, even tho there is a shortage of equipment and space in the whole world. Slowly but surely, everything is going back to the way it used to be.