Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:07] Speaker B: Welcome to the Lodestar Podcast News in Brief, where as always, we are going to be bringing you the most important points from last week's supply chain news. Coming up in this episode we are going to be taking a look at situation update to what is happening in the Middle east and the Strait of Hormuz. Plus the impact that subsequent fuel shortages are having on air freight capacity and ocean freight surcharges. We're also going to be taking a look at ocean freight spot rates and how these might be being impacted by the supply versus demand balance with the container shipping segment. We're also going to be taking a look at Q1 throughput reports from major European hubs.
And we are going to be taking a look at how airfreight capacity is being redeployed on some major lanes with some higher yields.
And before we get into this week's episode, I need to ask for your help with something. We are taking a look at what the real impact of AI on the supply chain is for forwarders and Customs Brokers in 2026. If you could take a few minutes to fill out our State of the AI survey as a thank you, you will get the raw data and exclusive early access to the final report before the official launch. So please click the show notes in the bottom down there if you are watching to participate.
Thank you very much. Let's get on with the episode now. A bit later on in the episode I'm going to be joined by VP and Head of Sales and Marketing at Rotate, Jonathan Mellink to chat through this week's Air Freight News. But we're going to start on Ocean Freight and I'm currently joined by Gavin Van Maal. Hello Gav.
[00:01:44] Speaker A: Hello Shola, how are you?
[00:01:45] Speaker B: I'm very well, thank you. How are you?
[00:01:47] Speaker A: Yeah, not bad, not bad. You know, spring, it's sunny, we've all got spring in our steps, so to speak.
[00:01:53] Speaker B: Everyone loses their minds in England when the sun comes out. Yeah, Gav, for the last few episodes we've started with a bit of a situation update due to the conflict in the Middle east and the closure of the Strait of Hormuz. So I think it's useful if we keep doing this because it's such a fast moving story. How do things look at the moment?
[00:02:12] Speaker A: Well, it was, I think it's described in military terms as the fog of war where you're not quite sure. This is a term that describes where everything. Not quite sure what the situational awareness often happens in the earliest parts of a war which is a sort of roundabout way of saying it's all a bit of a mess, as you might expect. But I'm going to try and do this in a, in a kind of order of battle way. Okay, so we'll go back.
Yeah, so we go back. Last Friday the Iranians announced that have declared that the Straitforward mosque was open. To which no one really believed. And given that the United States was still blockading the blockade, as it were. And over the weekend the US seized the Irisyl box ship, the Tuska. Iran seemed to on several box ships, including a CMA CGM MSC managed to sneak out six vessels from the Gulf from behind the Strait of Hormuz. And then it transpired in the early part of last week that Iran had actually seized two of these vessels. So we've got the MSC Clara, MSC Grace, the MSC Margaret, the 13th and the MSC Madeleine all exited. If you look at AIs now, they're all basically sailing in convoy almost across the past the lower edge of Sri Lanka. But two of the vessels, the MSC Francesca and I've been dreading this moment. But it's the MSC Epamonidas. It's not, but that's what I'm going with at the moment. I'm really sorry. I actually lived in Greece for a while so I should be doing better than that. But these two vessels have been seized by the Iranians and there's been quite a lot of sort of footage that has, you know, basically provided evidence of that. So. So that's sort of where we are, which. And if you put all that lot together then basically Hummus is still shut. Although there was some vessels that managed to get out. There were also another couple of ships apart from the two MSC ones. So I think Linalytica says it's, it's, it's. I think there's under a hundred box ships stuck there now, so it's less than it was.
I don't know what of, of those ships, them ships getting out there or the poor seafarers are stuck.
[00:04:28] Speaker B: Yeah, yeah. I was going to say we absolutely should spare a thought to all the seafarers that are caught up in this. And I also do want to say we are currently recording on Thursday 23rd April in the afternoon just in case anything changes or is out of date by the time that this is released. Obviously there was this ceasefire extension announced. So this is kind of good news, I guess. But the Strait of Hummers is still not viable, so carriers are still having to find workarounds. What is the latest with this. How are carriers coping?
[00:04:58] Speaker A: It's sort of been saying in some of our previous podcasts, Charlotte, that we thought, you know, that there are a number of various alternative, what they call Gulf bypass ports options for carriers. But we sort of predicted that the main one would become, would ultimately be Jeddah.
And I think that's starting to prove the case. I mean this week we had, we had an announcement from Gemini. Now Gemini has been since the closure of the Red Sea, the Gemini partners have been serving Jeddah via three feeder services out of their term. They got terminal on the northern end of the Suez Canal and they've been operating three feeder services down to Jeddah. So they announced this week that two of those are going to be closing because they're going to be replaced with the arrival of the new. It's the AE19. In Gemini parlance it's known as the asia Med Loop 4 and they're going to be extending that Med Loop into the Red Sea to include a caller Jeddah at the end of the rotation and that that brings Jeddah back into the Asia Europe network. Two actually means quite a large jump in capacity provided by the Gemini carriers into Jeddah. So the two feeder services at the moment have like a 4000, 5000 TE ships that go in there on a weekly basis. That's going to be replaced by 14 and a half thousand TEU ships. It's about 50% increase in capacity. And basically rates into Jeddah from Asia particularly have eased. Senator, I've just got some data here for it. But so we had, Senator reported that so spot rates between China and Jeddah went up 63% in the aftermath of the war, in the aftermath of the outbreak of war. Sorry and.
But they've fallen 11% over the course of April.
And actually I did another chat. I went on to our account on the freighthouse terminal. It was very similar story. So Ningbo Jeddah, just before the beginning of the war, the rate for a 40 foot was $2850 by the end of March. About a month later it jumped to $9,000 for a 40 foot and it now stands at just over 7,000. So those have started easing down. There's obviously a greater degree of capacity in there. But of course a lot of it depends on how much capacity they can secure in the hinterland. You know, this big trucking land transport leg the Middle East. And I've been talking to some sources today actually and trucking capacity is looking like a really, really major issue for people Maersk also said this morning that it was actually stopping bookings for UAE destinations via Jeddah. And our sources in Jeddah in the haulage industry say that demand at the moment is currently about four to five times normal.
And what used to be prior to the crisis, average rate for a for a truck from Jeddah to the UAE was 4,000, around about 4,000 Saudi Riyals, which is just under $1,000. And right now the rate for the same route is between 18 to 21,000. Real sort of $45,000. Prices have quadrupled, quintupled.
Is there enough capacity there?
Well, I mean, to be honest, I don't actually know at the moment. We are starting to scrape away at this issue and initially it looks to be very constrained.
[00:08:32] Speaker B: Right, okay. No, that's interesting. Perhaps more to come on that then as you speak more to your sources there. I also wanted to ask you. So we had some reports last week, obviously we're now into Q2, so we're starting to see some Q1 reports. We had some Q1 throughput reports from major hubs in Europe. We had Rotterdam and Antwerp, Bruges of their container throughputs actually went down in Q1, very marginal declines. But was this due to what is happening in the Middle east or is this just something else entirely?
[00:09:02] Speaker A: So I think actually, Charlotte, you'll find that although the overall tonnage was. Was in Rotterdam was down, actually container numbers in terms of TEU were 0.3 up.
[00:09:17] Speaker B: Right, okay. Yeah, I think it was total 0.7% down. But I think they said that the loss of dry bulk containers, that's it was offset the gains in containers and.
[00:09:28] Speaker A: Yeah, yeah, that's right. And actually they also added that really, that 0.3 growth was mainly due to empty container repositioning. So. Right, it's kind of flat. Yeah. And then Antwerp saw this 2.6% decline in TE volumes. This still sort of weirdly, you've got this thing where in 2025, Rotterdam handled slightly more than Antwerp by about half a million te for the full year. And then for the first quarter, Antwerp declined more than Rotterdam. But first quarter on quarter, Antwerp has still handled more to EU than Rotterdam did this quarter. So they're sort of neck and neck as the biggest poor.
[00:10:05] Speaker B: Right.
[00:10:07] Speaker A: Both of them would have were hit by heavy weather. I mean, we talked about that. We had some really shitty, wet, really bad weather in the first quarter. Antwerp also had this pilot strike which saw quite a few vessel diversions. But I think sort of broadly there's people don't like using Antwerp. I mean they have to because they're sort of such big ports. But we hear a lot of complaints from shippers and forwarders about sort of congestion issues in both of them. And I suspect that there's where people have the opportunity to have their cargo unloaded, alternative ports than they probably take them. So my conclusion is relatively sort of primary one or relatively early conclusion is that there is. They're losing market share in the North European range. Not by a significant amount, but it's
[00:10:57] Speaker B: limited impact from what's happening in the Middle East.
[00:11:00] Speaker A: Yeah, exactly, yeah, sure.
[00:11:02] Speaker B: Well, looking at rates now, because this is perhaps something that is being impacted by the situation in the Middle East, I want to take a look at what rates, what spot rates are doing this week, aside from the enormous fuel surcharges that we've seen.
[00:11:16] Speaker A: Yes.
[00:11:16] Speaker B: And we've had a story, we had a secret squirrel from one major retailer who was saying that they're very, very unhappy with carriers issuing these opaque fuel surcharges.
[00:11:26] Speaker A: Yeah.
[00:11:27] Speaker B: So yeah, perhaps more on that next week. But yeah, how are spot rates looking at the moment?
[00:11:32] Speaker A: I mean, I get, I'm gonna say, I think I said this last time I was on this, that they're still unaffected by Hummus. Right. It's really not having an impact that, you know, we'll take the three main east, west ones because actually there's been some interesting movements. So Asia, Europe, I mean there's often a seasonal slump around this period of the year. You know, the post Chinese New Year people aren't starting to ship for peak season. Although of course last year we saw peak season starting around. Well, it was almost around this time. So all bets are off. However, at the moment demand isn't particularly strong. Our sources describe it as weak. The carriers aren't reducing capacity either through bank sailings or other, you know, smaller vessels or whatever. So everyone I've spoken has no issues finding either space or equipment and on. You know, they were down. This week's World Container Index from jury was down 4% from Shanghai to Rotterdam and it was down 8% from Shanghai to Genoa.
Couple of carriers, Hapag and CMA CGM this week have announced new FAK levels, all kinds rate levels to be introduced on the 15th of May.
And I mean it's like experiencing deja vu because they're both in the like they're basically going to go for three and a half thousand per 40 foot into North Europe and $4,000 into the Med. And these are the. Exactly the Same fak rate levels that they tried to implement at the beginning of March and in the middle of March. Yeah, I mean they really, how on
[00:13:13] Speaker B: earth do you remember that?
[00:13:14] Speaker A: Haven't gone anywhere. Yeah, they've just, they sort of flip up, flip flop up and down but really on a sort of quarterly period they've gone absolutely nowhere. So you know that's, that's Asia, Europe, on the Trans Pacific they have introduced several blank sailings. There have been reports from some of our forwarder net contacts of rollovers. The WCI's Shanghai Los Angeles rate was up 4% and to new York it was absolutely flat. Although forwarders do say that there is still room for discounting but how long those that remains is open to question. Of course we're right in the middle of the contracting season at the moment so it's really, really important for the carriers to try and maintain those rate levels if they want to secure decent contracts this year. And I suspect that the negotiations will be really tricky. Right, yeah, there's too much capacity and the demand isn't there, especially bang on the tariffs on top of it. And it's.
[00:14:10] Speaker B: Yeah, well that's exactly what I was going to ask you about next actually. I mean it all comes back to the supply demand thing. We've been looking at capacity for ages now and it's seems like it always gets kicked down the road a little bit because there's some sort of major update to the world that happens and we suddenly need loads more capacity. But is it now really starting to show?
[00:14:27] Speaker A: Yeah, I think so. I mean if you, if you look at the transatlantic you can actually see the effect that this stuff, I mean that's happening right now. So on the transatlantic from the Rotterdam New York leg of the, of the WCI that was up 15% week on week.
[00:14:41] Speaker C: Right.
[00:14:41] Speaker A: And two weeks ago it was up 25%.
So and, and that's basically being attributed. There were the fuel surcharges at one point but the Ocean alliance have suspended one of their strings and middle of 15th of April there was a thousand dollars peak season surcharge per 40 foot on transatlantic shipments introduced by some, I think it was cma. So that has forced up the rates and in conjunction with the reduction in capacity you can see that the overall rate level is now up at around $2300 per 40 foot. And you know, you go back two months ago and it was 1500 dollars per 40 foot. So, so you can see the effect that the reducing capacity has.
I mean, and if you think it's bad or you think it's weird now you wait until 27 and 28 when. When the. When very large amounts of new buildings are going to be delivered.
You sent me the Braemar figures a few days ago, Charlotte, and that was. So they think 1.5 million TE to be delivered this year.
That rises to 3.5 in 2027 and goes up to 5.2 million in 2028. I mean that's really big.
[00:15:52] Speaker B: Lots of scrapping needed.
[00:15:53] Speaker A: Yeah, yep. Scrapping would be one way idling. I wonder what's going to happen to the charter market. But yeah, structurally looking forward there's going to be. I mean, I think I can't see any other outcome next year apart from there being a really vicious rate war. I just don't see how.
[00:16:13] Speaker B: Or some sort of major, major world event again. Although I don't want to tempt fate with that.
[00:16:19] Speaker A: No, no, you did quite.
I just want a last thing on that. Lars Jensen made an interesting point at tpm. He said that, you know, after they've earned so much money in recent years, the balance sheets are healthy enough.
[00:16:31] Speaker B: They being the carriers.
[00:16:32] Speaker A: Yeah, they being the carriers. The carrier's balance sheet is healthy enough for. To withstand a couple of years of loss making rate war. Right. And what's going on at the moment with all this great big ordering is, is it's all about the carriers positioning themselves. What happens in TW in the 20s when the next round of alliance shakeup happens and these new sort of trading, you know, the trade deals between like India and the EU and China and Africa and all these things start really coming into play and trade routes actually start sort of changing. It's all about that. Yeah. Anyway, that's short term pain for the carriers and next, I mean you did
[00:17:08] Speaker B: quite a detailed analysis, analysis of this over on Premium. So definitely worth a read for anyone interested in the outlook on supply and demand over the next coming years. What else was on Premium last week? Do you have a little teaser for our listeners?
[00:17:23] Speaker A: So Premium, there was a really interesting preview of Kudanagle's results which are actually going to be published while this podcast is being edited. So, you know, that's kind of, that's. There was. There was a very interesting analysis of the biggest mvos, you know, the fateful intermediaries on the Trans Pacific. Amazon has now become the largest in the first quarter of 2026. We also had a new. This is a good one actually. We had a new contributor, very senior industry executive who's going under the pseudonym Mr. Rain, and he's been writing about MA in freight forwarding and management techniques of M and A. And it's a. It's fascinating, actually. Quite disturbing article in equal measure. So I'd really urge people to read that, especially if they're in the takeover business. And then we've got a load of. Yeah, it was really good. Yeah, yeah, yeah, it's really good. And if you. If you want a sort of insight into why some of these takeovers go wrong, I would. I would. I would say it was essential reading. And then we've got, you know, Ali's. Ali Pasetti's stuff about share prices and. And who's up, who's down, who's out, who's in.
[00:18:32] Speaker B: All sounds very good. Thank you so much for your. For your time, Gav. I'll let you go now. I really appreciate it.
[00:18:38] Speaker A: Thank you so much.
[00:18:38] Speaker B: See you later. Now, to talk about the current picture in air freight, I am joined by Vice President and head of Sales and Marketing at Rotate, Jonathan Mellink. Hello, Jonathan. Thank you so much for joining me today.
[00:18:49] Speaker C: Hi, Jonathan. It's a pleasure being here. Thank you.
[00:18:51] Speaker B: Now, one of the wonderful tools that you have over at Rotate is your live capacity database. So you are the best person to ask about this. We had a story last week based on a DHL webinar, and they were saying that because of this extension of the ceasefire, we're starting to see this steady stream of Gulf capacity coming back online, along with the first lowering in rates that we've seen. So what are you seeing on your capacity database? Is this true?
[00:19:15] Speaker C: Yeah, it's a good question. So there's two ways that you can actually frame this question. The first one being if you look at golf capacity from an airport perspective, and the other one is golf capacity from a airline perspective. So golf capacities on air port perspective actually has not further increased much since the ceasefire.
[00:19:32] Speaker B: Right.
[00:19:33] Speaker C: What we do see that the Gulf carriers are pretty much maxing out their capacity. So there's a difference. So you would see that the hubs that they have are not fully operating at their maximum, but the carriers are being creative and they're. They were forced, obviously, to be creative. So the carriers have redeployed capacity in ways and places that are not directly linked to the Gulf.
[00:19:55] Speaker B: Right. Okay. Well, I mean, what's interesting is we had another story as well, that while this capacity is kind of coming back online, carriers aren't rebuilding their networks, they're kind of redeploying this capacity in search of higher yields. Is that what you're seeing? And if so, which lanes are we seeing gains on?
[00:20:13] Speaker C: Yeah, so the, the key lanes that we're seeing yield changes on are basically Asia, Europe, and of course we see in and out of the Gulf, in and out of the Middle East. In and out of the Middle east is mainly due to the fact that there's nobody really flying into that area at the stage. So that is, that is really just a lack of capac problem. The question on carriers redeploying capacity really sits on Asia because we do see specifically of course, Asia into Europe, we see about a rate increase, around 30% of all in rates. And we do see also quite significantly that carriers are redeploying capacity, including the Middle east carriers that we talked about earlier. So you do see carriers being more creative, I would say, with the rotations that they're flying for the extent that they can.
[00:20:59] Speaker B: Right, okay, that's interesting. Something that is also contributing to this cut in capacity is the fuel shortages. Now this is getting worse as the situation in the Hormuz progresses and it hasn't really come to a conclusion yet. So we're still seeing this fuel shortage and we've actually started to see a few airlines cut flights because of this. I think we had a story that there was some in Europe, specifically KLM and Lufthansa. It was a really small percentage of their flights, I think, but they are cutting capacity due to fuel shortages.
So do you have any idea of how much capacity was cut and if this is going to continue to be a reason that carries cut capacity?
[00:21:38] Speaker C: Yeah, yeah, that's a good question. So the fuel shortage is by far the most pressing issue with any of our customers. And that is also because it's uncharted territory. We've never had this in the industry. Right. And you can throw, you can't throw money at that problem either because if there's no fuel, there's no fuel. So what we then see indeed is that you do see specifically regional or domestic flights being cut. So when we look, for example, we saw some minor changes currently in Vietnam already. Vietnam is one of the places as being very significantly impacted by fuel shortages. And we do indeed hear stories, and we hear stories in Australia for Qantas also downscaling domestic operations. We hear the same story from Lufthansa island, from klm, all in minor moments at the moment, at this stage, specifically for you as a shipper, if you are a shipper, I would Indeed start asking your 3 PL to like, hey, what is the, you know, what Is the contingency here my freight needs to keep moving. If we can't fly, are there other alternatives or potentially should we reroute into bigger gateways where there's potentially a safer and a bigger supply of fuel? Because yeah, I can bet you that the bigger airports will be prioritized, obviously that altogether domestic really seems to be the place where we can expect changes and we don't really expect changes on the international side at this stage also simply because that's where also for the airlines, the money in the end is earned on the passenger side, that is the international legs. So yes, massive problem, but mostly domestic. It's annoying for passengers, but less so for cargo.
[00:23:11] Speaker B: I mean, presumably it's the domestic lanes because they can do trucking and it's easier to find other routes, isn't it? Like rail trucking.
[00:23:18] Speaker C: If. Take an example as. Yeah, there's what, 10 flights day from km between the Amsterdam Heifer. Yeah, you can cut that to nine. That's a 10% reduction. Right, right. But it's not necessarily the cargo legs. Indeed. One of the things of course that is very much tied to more than a few shortage, but also to fuel price is that older freighter aircraft are guzzling fuel and it's extremely expensive to operate those. And also for shippers. Yeah. At some point your supply chain can't handle these increasing costs. So you can't not. Airlines are not always able to fully recuperate their additional fuel costs. But there's a very interesting balance where even if there is fuel, some airline, some airlines might choose not to operate specific aircraft types because they're just losing money every kilometer that they fly. And then of course the very last part is even if there's a few shortage, what you then hear carriers do is they bunker, right. So they tank up fuel at origin for both the lag there and the return lag. This is a massive payload hit. So there's less capacity in the market.
So even though you are flying your normal operations, your capacity on your current capacity on that, on that aircraft will be significantly reduced due to bunkering. And you don't really see that, you don't see that in your data. You don't see that anywhere. And it's like very expensive because you're flying fuel across the world.
That is a very expensive joke, of course. So there's quite a lot of things happening in this fuel area where quite frankly I think if this continues, we are into uncharted territory. I don't think many people know exactly where this will go, but many people are putting plants in place and working with their GPLs, their shippers, their partners to also get some bit of a grasp on what's happening.
[00:24:58] Speaker B: Main advice right now, communicate with your partners. Figure out a contingency plan. Thank you so much Jonathan. I really appreciate that.
[00:25:03] Speaker C: No problem. Thank you for having me.
[00:25:05] Speaker B: And that is all we have time for on today's episode of News in Brief. I mean, there's so much going on at the moment that I'm sure we could do a much longer episode, but we want to keep it brief, of course, as is in the title. Thank you so much to Jonathan and Gavin for joining me on today's podcast and thank you all for listening or watching. If you are over on YouTube and if you do have a few spare minutes, please take the time to fill out our State of AI survey and be the first to get the report and the raw data when the survey is complete. Thank you so much for joining me and I will see you next week.
