COVID-19 MARKET
OUTLOOK
11/01/2021 – V01
2
KEY POINTS
Source: World Bank, Seabury, DrewryCOVID 19 - MARKET OUTLOOK
Prospects for the global economy are uncertain, and several growth outcomes are possible. The global economy is
estimated to have contracted 4.3% in 2020, before expanding to 4% in 2021. a previous release.
Year-to-date uplift loss as a result of COVID totals 14M tonnes of capacity. Direct international widebody belly
cargo capacity decreased by as much as 82% YoY, after the majority of widebody passenger aircraft were grounded
from March onwards. Freighter capacity (+5M tonnes) was insufficient to make up for lost belly capacity.
Close to 40% of the widebody passenger aircraft are still in storage. A slight increase of retrieved widebody
passenger aircraft in Q4 indicates these aircraft are likely used as passenger-freighters to satisfy demand of the 2020
Q4 peak.
Between weeks 2 and 5 this year, 2 cancelled sailings have been announced on major trades: Transpacific,
Transatlantic and Asia-North Europe & Med, out of a total of 488 scheduled sailings,
Container shipping remains disrupted by box equipment shortages which are restricting available capacity and
so forcing freight rates to record highs.
3
ECONOMY – GLOBAL ECONOMIC PROSPECT
Source: World Bank
COVID 19 - MARKET OUTLOOK
Global economy is estimated to have
contracted 4.3% in 2020. In advanced
economies, the initial contraction was less
severe than anticipated, but the ensuing
recovery has been dampened by a
substantial resurgence of COVID19 cases.
Prospects for the global economy are
uncertain, and several growth outcomes are
possible. In the baseline forecast, global GDP
is expected to expand 4% in 2021, predicated
on proper pandemic management and
effective vaccination limiting the community
spread of COVID-19 in many countries, as
well as continued monetary policy
accommodation accompanied by diminishing
fiscal support.
After this year’s pickup, global growth is
envisioned to moderate in 2022 to 3.% —still
above its potential pace, but weighed down
by lasting damage from COVID19.
Real GDP1
(Percent change from previous year)
2018 2019 2020e 2021f 2022f
World 3.0 2.3 -4.3 4.0 3.8
Advanced economies 2.2 1.6 -5.4 3.3 3.5
United States 3.0 2.2 -3.6 3.5 3.3
Euro area 1.9 1.3 -7.4 3.6 4.0
Japan 0.6 0.3 -5.3 2.5 2.3
Emerging market and developing economies 4.3 3.6 -2.6 5.0 4.2
China 6.6 6.1 2.0 7.9 5.2
Russian Federation 2.5 1.3 -4.0 2.6 3.0
Brazil 1.8 1.4 -4.5 3.0 2.5
Saudi Arabia 2.4 0.3 -5.4 2.0 2.2
Egypt, Arab Rep. 5.3 5.6 3.6 2.7 5.8
South Asia 6.5 4.4 -6.7 3.3 3.8
India3 6.1 4.2 -9.6 5.4 5.2
Sub-Saharan Africa 2.6 2.4 -3.7 2.7 3.3
Nigeria 1.9 2.2 -4.1 1.1 1.8
South Africa 0.8 0.2 -7.8 3.3 1.7
4
COVID-19 – TRADE IN MEDICAL GOODS (H1 20 vs H1 19)
IATA COVID 19 - MARKET OUTLOOK
• While total world trade declined by 14% in the first half of 2020 compared to the same time period in
2019, imports and exports of medical goods increased by 16%, reaching US$ 1,139 billion in value.
• Leading importers of COVID-19-critical products registered double-digit import growth compared to 2019,
including 62% in France and 52% in Italy.
• Trade in all categories of medical products increased in the first half of 2020. Trade in personal protective
products grew 50.3%, followed by medicines (11.6%), medical supplies (9.6%) and medical equipment
(5.5%).
5Seabury
COVID 19 - MARKET OUTLOOK
Global international capacity fell by 20% year-to-date (Jan-Nov, compared to last year), or 14 million tonnes of capacity uplift. Freighters
accounted for 66% of 2020 cargo capacity, up from 42% last year. Integrators went from 16% to 24% in the same period.
AIR FREIGHT – YEAR 2020 IN SUMMARY
• Major cargo-reliant
airports showed an increase in
international capacity
• 700,000 tonnes (~5% of total air
trade) of PPE and work-from-home
items flown between January and
September
• Since April, carriers have operated
more than 400,000 passenger-
freighter flights, enabled by high
yields.
• Capacity recovery in 2021
depends strongly on global
distribution of vaccines, with
vaccines anticipated to generate
around 60,000 tonnes of air freight
demand in the coming 2-3 years.
6Seabury
COVID 19 - MARKET OUTLOOK
COVID-19 has pushed load factors and yields up due to a decrease in supply. Global air cargo demand is constrained by
capacity, pushing load factors up by 12 percentage points compared to October 2019; yields remain to be at +60% higher
than 2019 levels in Q3 & Q4
AIR FREIGHT – MARKET TRENDS
7Seabury
COVID 19 - MARKET OUTLOOK
Year-to-date uplift loss as a result of COVID-19 totals 14.5M tonnes of capacity. Direct international widebody belly cargo
capacity decreased by as much as 82% YoY (more recently ~60%), after the majority of widebody passenger aircraft were
grounded from March onwards
AIR FREIGHT – MARKET TRENDS
8IATA
COVID 19 - MARKET OUTLOOK
Industry-wide capacity continued to improve at a
modest pace, with the year-on-year (yoy) decline
moving from 22.4% in October to an even 20.0% in
November.
Bellyhold cargo capacity fell by 53.0% yoy in
November, a robust gain from October (a 58.4%
fall).
While actual dedicated freighters capacity
increased slightly, airlines were unable to match
the increase in demand for the peak season due to
limited fleet size and a number of specific
operating issues such as flight cancellations at
PVG (Shanghai) airport.
This led to a decline in the pace of freighter
capacity growth – up 20.0% yoy in November vs
26.2% yoy in October – offsetting part of the gains
on the belly side.
AIR FREIGHT – CAPACITY GROWTH
Int’l belly cargo and freighter capacity growth
ACTK = Available Cargo Tonne Kilometers or Capacity
9
SEA FREIGHT – MARKET TRENDS
• The global container fleet
grew 2.9% in 2020, the
lowest rate since 2016
• However 2020 saw an
increase in ordering activity.
Capacity contracted rose
30% compared to 2019
• Orders placed in 2020
averaged 9 325 teu in size,
an increase of more than
2.5x in just four years
Alphaliner COVID 19 - MARKET OUTLOOK
10
SEA FREIGHT – CAPACITY OUTLOOK (WEEK 02 – WEEK 05)
Across the major trades: Transpacific, Transatlantic
and Asia-North Europe & Med, only 2 cancelled
sailings have been announced, between weeks 2 and
5, out of a total of 488 scheduled sailings.
The overall cancellation rate has decreased by 88%
year on year from Jan’20 to Jan’21, and effective
capacity has increased by 9% during the same period.
As 2021 starts, we do not see any significant changes,
apart from the Brexit trade deal. It is just a continuation
of the end of 2020. Demand for container transport is
soaring as there is not enough capacity and most
importantly, not enough containers to meet the
demand. Meanwhile, spot rates continue to test record
highs.
Drewry COVID 19 - MARKET OUTLOOK
11
SEA FREIGHT - CAPACITY OUTLOOK (WEEK 49 – WEEK 7 2021)
HighlightsUpcoming 12
weeks (Y/Y)
Asia
-
North Europe
In the Asia-North Europe trade lane the weekly capacity decreases drastically in week 52 and 1, and
increases significantly in week 53, as three blanks will occur in week 52 and 1. On the backhaul, the
weekly capacity increases significantly in week 49 and 51, and decreases drastically in week 53.
15.4%
Asia
-
Mediterranean
In the Asia-Mediterranean trade lane the weekly capacity increases significantly in week 50, and
decreases drastically in week 51 and 52, as four blanks will occur in week 51 and 52. On the
backhaul, the weekly capacity increases significantly in week 50, and decreases drastically in week
52.
8.2%
Asia
-
North America East Coast
In the Asia-NAEC trade lane the weekly capacity increases drastically in week 49 and 1, and
decreases significantly in week 53.31.6%
Asia
-
North America West Coast
In the Asia-NAWC trade lane the weekly capacity increases drastically in week 1, and decreases
significantly in week 5. On the backhaul, the weekly capacity decreases drastically in week 49, 51
and 5, and increases significantly in week 52.
42.8%
Asia
-
East Coast South America
In the Asia-ECSA trade lane the weekly capacity increases drastically in week 49, and decreases
significantly in week 51 and 52. On the backhaul, the weekly capacity increases drastically in week
49, 52 and 2, and decreases significantly in week 53.
14.2%
Sea Intelligence
COVID 19 - MARKET OUTLOOK
12Sea Intelligence
HighlightsUpcoming 12
weeks (Y/Y)
North America East Coast
-
East Coast South America
In the NAEC-ECSA trade lane the weekly capacity decreases significantly in week 49, and increases
drastically in week 50. In the ECSA-NAEC trade lane the weekly capacity decreases significantly in
week 51, 53, 4 and 6, and increases drastically in week 5.
15.0%
North Europe
-
East Coast South America
In the North Europe-ECSA trade lane the weekly capacity decreases significantly in week 49, and
increases drastically in week 50. In the ECSA-North Europe trade lane the weekly capacity
decreases in week 51, 2 and 6, and increases in week 53, 1 and 4.
6.3%
North Europe
-
North America East Coast
In the North Europe-NAEC trade lane the weekly capacity decreases significantly in week 49 and
51, and increases significantly in week 50 and 52. In the NAEC-North Europe trade lane the weekly
capacity decreases drastically in week 53, and increases significantly in week 3.
14.3%
Mediterranean
-
North America East Coast
In the MED-NAEC trade lane the weekly capacity decreases drastically in week 49, 50, 52, 53 and 3,
and increases significantly in week 51. In the NAEC-MED trade lane the weekly capacity increases
significantly in week 51, and decreases drastically in week 52.
11.8%
Europe-
North America West Coast
In the Europe-NAWC trade lane the weekly capacity decreases significantly in week 49, and
increases drastically in week 50. In the NAWC-Europe trade lane the weekly capacity increases
drastically in week 50 and 51, and decreases significantly in week 52 and 4.
0.2%
COVID 19 - MARKET OUTLOOK
SEA FREIGHT - CAPACITY OUTLOOK (WEEK 49 – WEEK 7 2021)