View in browser _________________________________________________ OPERATIONS: Domestic Status: YELLOW Outbound tender volumes are on the decline again and are causing a rise in shippers cost to move over the road. Shippers have been paying 12% more than Q4 2020 due to the drop in overall volume for trucking companies. Winter weather continues to disrupt the Northeast and Midwest and even Texas, with Chicago, Columbus, Pittsburgh, and Dallas being the biggest markets hit the hardest. Shipper requests for capacity fell due to the weather and the uncertainty it caused. The rates shipper requests were rejected rose to the highest point this year as various trucking companies wanted no part in driving in this weather. Tender rejection rates along with spot rates increase as availability declines. First, middle, and final-mile Pegasus partners continue taking precautions, both on the road and in the office, including consistent cleaning of trucks, warehouse floors, and office desks. Our partners are also required to wear masks and maintain 6 feet of separation at every interaction. This, on top of promoting a touchless sign-off process, has ensured that we are doing everything we can to stop the spread of COVID-19. As the country moves closer back to normal, our partners around the country continue to do the same. While still taking every necessary precaution, inside deliveries are now offered at every location in some capacity. See the updated chart below: International Status: YELLOW Air Freight Air cargo capacity is expected to remain constrained for some time, resulting in forwarders increasingly relying on charter operations. The vaccination programs were expected to lead to a pick-up in passenger travel in the second half of the year. Unfortunately for shippers, this capacity will mainly be short-haul and domestic flights, which won’t help with space shortages on long-haul cargo operations. Long-haul travel, which is a much bigger part of global air cargo capacity, should be slower to resume. In terms of additional freighter aircraft meeting any capacity shortfall, lead times for production and conversion freighter aircraft were long. Meanwhile, the economic outlook remained uncertain which may put companies off investing in all-cargo aircraft. Both factors are headwinds to augmented freighter capacity. As a result of ongoing belly capacity shortages, freight forwarders are likely to continue to utilize charter operations to meet demand. A number of large freight forwarders have articulated that charter will become a more permanent part of their service offerings. If and as charter usage becomes more mainstream, there may be some practical competitive implications. This trend likely accelerates consolidation that was already occurring around players with technology, sophistication, and global network differentiation. Rates are also likely to remain high. The growth of e-commerce was also affecting air cargo supply chains, with the need for rapid replenishment pushing companies towards freighter operations that utilize secondary gateways as opposed to belly capacity operating to main hubs. However, forward markets remain notoriously difficult to predict, with a potential demand shock with a logical move of consumer spending away from goods to services, reversing the 2020 trend. Worldwide load factor was up by 17% year over year but dropped 2% compared with December. Chicago Rockford International Airport (RFD) has started the construction of a second cargo facility in close proximity to the airport. The new facility, which is in addition to the one announced in October last year, will feature a 100,000 sq ft building, a ramp to accommodate six Boeing 747 aircraft, and a road to accommodate trailer traffic to and from the facility. Emery Air, an aircraft handling company based at RFD, will operate the new facility. Construction of the first facility is expected to be complete by July 1, 2021; the second is expected to be completed by November 1, 2021. Adding this new element to the operations at RFD in addition to UPS and Amazon operations, further elevates RFD as a world class and well-known airport throughout the world. Heathrow Airport and an East Midlands consortium have applied for freeport status in the UK. The government closed the application period for freeport status on Friday, with 30 bidders thought to have submitted proposals. Companies using freeports will be able to import goods without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs. France-based container shipping line CMA CGM is set to enter the air cargo market with a fleet of four Airbus A330-200 freighters. The aircraft will be offered through the carrier’s new CMA CGM Air Cargo division and answer “growing demand” for “agile solutions.” This division will launch with four Airbus A330-200F aircraft and will leverage commercial partnerships with airlines in order to deliver global coverage. This is a major milestone in the development of our logistics services. United Airlines recently stated that it was grounding 24 of its Boeing 777 airplanes after the U.S. Federal Aviation Administration (FAA) issued an emergency directive following an engine failure on one of the flights. A Boeing 777-200 airplane from Denver to Honolulu suffered an engine issue shortly after takeoff. It turned around and made a safe emergency landing at Denver International Airport, with no injuries of all the 241 people on board. Ocean Freight At the moment, space is much more important than rate. Transpacific Eastbound – All space continues to be very tight especially the PNW/USEC/Gulf route with equipment shortages. Carriers are still charging exorbitant premium surcharges for West Coast and East Coast priority release. This is on a case by case basis and needs to be confirmed prior to shipment. LA/Long Beach is still extremely congested with many vessels at anchor awaiting unloading. Vancouver is also experiencing this as the terminals there are under construction. The Vancouver situation will last until at least June. The knock-on effect is that Prince Rupert is now also congested. The congestion issue is causing the carriers to have “blank sailings” as the vessels cannot return to Asia base ports for loading. Most of the extra loaders are booked to LA/Long Beach thus adding to congestion. Customers are asking to switch cargo to reverse IPI causing the same issues to arise on the East Coast ports. YML Intermodal service from Prince Rupert to Toronto, Montreal, Chicago, and Detroit has been suspended until further notice. This is reducing options to avoid LA/LGB. The Chinese Government has told the carriers to hold rates until March 15th. The global container availability outlook is still fairly bleak. We are recommending 21 days advance booking for any Asia to USA Eastbound Cargo. The 13,100-TEU Maersk Eindhoven lost 260 containers overboard during an engine stop due to heavy seas that prevented the ship from maneuvering. The Maritime Executive reports investigations are ongoing as the number of overboard containers rises industry wide. __________________________________________________ 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. BCP Blog __________________________________________________ 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 __________________________________________________ For questions, please email C19TaskForce@pegasuslogistics.com Pegasus Logistics Group, 306 Airline Drive, Coppell, TX 75019, USA, 800-997-7226 Unsubscribe Manage preferences