Freight Firms Report Surge in Shipments for Festive Rebound
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Freight carriers including container shippers and cargo airlines say global demand is building toward a seasonal peak that could outstrip last year’s as online consumer spending surges during the Covid-19 pandemic.
Container volumes may dip just 2% for 2020 compared with early industry-expert forecasts of a 15% slump, according to Rolf Habben Jansen, chief executive officer of German shipping lineHapag-Lloyd AG, which is deploying more capacity now than it did during the build-up to year-end holidays in 2019.
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The upturn is unlikely to deliver a bumper festive period for high-street retailers battered by the coronavirus outbreak, with internet-focused businesses the likely beneficiaries. Online Christmas shopping may even surpass store sales in the U.K. for the first time, according to research published last month by delivery firm ParcelHero. Consumers will spend about the same overall on presents and food as in 2019, it said, but are stopped from shopping in person by a new lockdown that bans non-essential retail.
Container lines are also being boosted by falling prices for bunker fuel, which could help lift Hapag-Lloyd’s full-year profit by almost 50% after it previously forecast a decline of as much as one-third.
Still, the Hamburg-based company’s shares traded 10% lower as of 4:31 p.m. in Frankfurt after it said the average rate charged per standard container was flat in the third quarter and will gain only slightly for the year, despite surges on some routes. Meanwhile, shippers are struggling with a container shortage in Asia, Jansen said, and ports elsewhere are congested with boxes stuck at terminals.
Cargolux’s Forson said the concern now is over whether freight demand could drop in the longer term as global economic growth weakens in the wake of the health crisis, depressing consumer spending.
“Once that happens there’s no escape valve for the cargo industry,” he said.
The picture for trucking firms also remains bleak, the International Road Transport Union said Friday, with global losses reaching $679 billion and a wave of bankruptcies looming. The situation is most acute in Europe, where new virus cases are at record levels.
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