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Analysis: Keep calm and hit the road with DSV

In a nutshell: With service restored in its European road network, DSV's recovery is turning from an operations job into a sales job. The argument among the banks is less about whether profits rise than about how fast, and the road business is where their 2027 forecasts diverge most. In June, DSV put the Road division in the hands of group COO Brian Ejsing (pictured below) - the natural born leader joined the company in 1986, spent 22 years in ...

Tariff anouncements cause cargo chaos for box terminals, says TiL

Sudden tariff announcements, not tariff levels themselves, trigger costly cargo surges that terminals cannot absorb, delegates at TOC Americas in Cartagena were told. Rather than destroying container trade, said TiL Group's director for terminal investments in North America, Tom van Eynde, tariffs were relocating it, pointing to cargo shifting from Canadian ports into TiL's US terminals as evidence. "It has been somewhat of a wild ride over the past year, the past two years," Mr van Eynde noted, referring to tariffs in the US being introduced and then cancelled. "They're not really reducing the trade flows, they're just relocating them." While the terminal operator saw a reduction in certain trade flows to the US through Canadian ports, he said these were then automatically being picked up by TiL terminals in US ports. Expecting the situation to be "a temporary thing", Mr van Eynde said he expected disruption to settle once tariffs hit a range of 10% to 15% - "at that kind of level we see very little impact anymore on the volume." The real damage, he said, came less from the tariffs themselves than from sudden announcements that triggered a rush of cargo before a deadline, only for conditions to return to normal once it passed. "That is probably the element that has hurt us most," he said. Carriers can respond to a surge by chartering extra vessels and running a new swing, which Mr van Eynde said had even lifted freight rates in their favour. Terminal capacity could not move at the same speed, building more takes years to plan and permit, he said, and by the time it was ready, demand may already have shifted again. "We are the ones taking the biggest hit from these kind of things," he continued. Despite the uncertainty, Mr van Eynde said TiL was investing more aggressively than ever, pointing to its position as the main terminal partner for MSC, the biggest carrier and still growing faster than the market, he added, as a way to offset the political risk in its portfolio. Deploying extra gangs and equipment could absorb a sudden peak, he explained, but it brought congestion to the yard and the rail operation, and a higher cost per box. "It's certainly eating out of our margins," he said.

TAC reports another surge in airfreight rates

The latest data from TAC Index, the price reporting agency on airfreight markets and the calculating agent for the Baltic Air Freight indices, show that rates have surged again of late. The global Baltic Air Freight Index gained 4.7% over the seven days up to 19 October, reaching a figure 26.4% up year on year - and above the highest points of the last two peak seasons, which typically occur in the run-up to Thanksgiving in the US and Christmas in Europe. This year, TAC noted, rates were already starting from elevated levels resulting from disruption to markets caused by the conflict in the Middle East and the war between Russia and Ukraine. These same conflicts have also caused a surge in jet fuel prices - up by 113.7% year on year to 16 October according to the latest IATA Jet Fuel Price Monitor. This will, TAC said, "put a hard floor under rates at which airlines will carry cargo". Geographical variations The surge in global airfreight market rates was led by a strong week-on-week increase in rates on the busiest lanes out of China to the US - as well as to a lesser extent to Europe, where rates have been lagging somewhat since July following a fall in volumes following the end of the old de minimis exemption from customs duty for small parcels coming into the EU. Spot rates out of Hong Kong and Shanghai have also been rising lately. Rates from Europe were by contrast a little softer week on week compared to recent increases - with falls overall on transatlantic lanes to the US as well as to India, Japan, Australia and South Africa, although there were further gains on lanes to China, Mexico, Brazil and the UAE. The index of outbound routes from Frankfurt fell by 6.6% week on week, although they remained well up year on year at 33.7%. Outbound London Heathrow rates also slipped a little, by 2.3% week on week, though they remained well above last year, up by 35.2% year on year. Rates were mostly firmer week on week out of North America on lanes to China and elsewhere in Asia as well as to South America, led by further gains on the busiest routes southbound from Miami. However, rates were also a little lower from the US on transatlantic lanes to Europe and the UK. There was also a further big gain week on week in rates from Mexico to Europe, leaving them well up year on year. Up on last week The previous set of week-on-week comparison figures from TAC Index, as reported by ACN, showed that there had been a slight drop in airfreight rates then as a result of the Golden Week celebrations in China, but overall the market remained firm heading towards the peak season. The figures for the week up to 12 October from the Baltic Air Freight Index showed that rates edged 2.1% lower that week, which "was not unusual for the Golden Week holiday period in China when factories often shut down and volumes decrease", according to TAC Index. However, TAC also highlighted that the market remained firm as the industry heads into the peak season and there was potential for rates to rise further - as has clearly been the case, judging by this week's latest data.