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August 20 2018

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August 20 2018 | The Journal of Commerce 15 www.joc.com International Maritime minimal. "It seems that for now further escalation between the US and Europe has been averted. How- ever, between China and the US, and mainly from China to the US, the effects might be felt more," he said. A spokesperson for global air charter carrier Atlas Air said it is watching the trade dispute devel- opments closely, "along with just about everyone else," but had not seen any specific impact on air cargo. "Since air freight is a global business, which regions and which products might be affected would depend on what tariffs are or might be imposed, and by whom and against whom. Based on the rhetoric to date, the major east-west trade routes across the Pacific would be a focus, as well as those across the Atlantic," the Atlas spokesperson told The Journal of Commerce. Herdman said that while the political rhetoric over trade relations and the threat of new tariffs is a cause for concern for air cargo carriers and its customers, it had not yet had any visible impact on actual trade flows or consumer behavior. "So far, there is no evidence of any impact on the air cargo business, perhaps because the classes of products being subjected to tariffs are mainly transported via ocean shipments," Herdman said. "Never- theless, the risk of tit-for-tat reac- tions may see a further escalation, ed, the fully automated Maasvlatke II terminal in Rotterdam was shut down and could not accept vessel arrivals from June 29 to July 6, 2017. Two days after the attack on Cosco, Itai Sela, CEO of Naval Dome, commended Cosco for its quick response and notifications to cus- tomers, although he told Fairplay, a sister publication of The Journal of Commerce within IHS Markit, that the virus may have been dormant for some time, and it was possible that other shore- and ship-based opera- tions may have been breached. "We strongly recommend to whoever discovered the attack to thoroughly verify the breach has been contained and has not infected any ships in the Cosco fleet," he said. Terminal operators in the United and $1.60 to $3.00 per kilogram on the China-US routes. Express rates from China to Europe rose $1 per kilogram in late June, which Freigh- tos believes could be a rush to deliver shipments before Europe factories close for the summer holidays. Commodity futures broker Freight Investor Service said air cargo rates continued to grow throughout July and are expected to increase further as airlines hold off committing their fourth-quarter space too early. "This is in the hope that they will achieve greater rates through the spot market at a later date. The rest of the year looks to be one where capacity squeezes will continue to push up freight rates," FIS said in a note to customers. Detlef Trezfger, CEO of Kuehne + Nagel, said growing world trade and high consumer confidence and ongoing spending have made the forwarder "very confident" for the second half of 2018. "We see that there's more uncer- tainty because there's a lot of noise in the market at the moment versus like six months ago. We need to stay confident and haven't seen any irri- tating influence in our networks so far," he said in a call with investors transcribed by Seeking Alpha. The only fly in the ointment could be the trade tariffs, although Scholte said that in the short term, the effects on air cargo would be minals and freight forwarder Damco. Maersk experienced vessel delays that pushed on-time reliability down from 74 percent to 55 percent. Although the impact on many of the terminals operated by its sister company APM Terminals was limit- spreading to a variety of sectors, with potential adverse impacts on trade flows, including disruptions to long-established global supply chains. International companies will react accordingly, responding to the resulting distortions in relative prices by evaluating alter- native suppliers and reorganizing production arrangements where necessary." But an escalation of the dispute could change that. "Trade wars are too often viewed as reflecting fric- tion between competing producers, but the real negative impact is borne by consumers who are confronted by higher prices and fewer choices, serving no one's long-term inter- ests," he warned. JOC email: greg.knowler@ihsmarkit.com twitter: @greg_knowler States and Canada said cargo han- dling continued without disruptions, although the process of communicat- ing with customers and with Cosco was more time consuming because it was accomplished via emails and phone calls, rather than electronical- ly through the Cosco network. Cosco established the "work-arounds" to prevent the virus from spreading. Ross said the cyber attacks last year on Maersk and in July on Cosco are a clear sign that others could occur because transportation logistics is a collection of many companies, and the industry requires a comprehensive plan of action. "There has to be a more sophisticated approach," she said. JOC email: bill.mongelluzzo@ihsmarkit.com twitter: @billmongelluzzo Europe-US rates show most movement in last month Average general and express rates on key air freight routes As of China-US China-Europe Europe-US 21-Jun $2.90-5.00/kg $2.80-5.00/kg $1.50-3.00/kg 28-Jun $2.90-6.00/kg $2.80-6.00/kg $1.20-3.00/kg 5-Jul $2.90-6.00/kg $2.80-6.00/kg $1.40-3.00/kg 12-Jul $2.90-6.00/kg $2.80-6.00/kg $1.60-3.00/kg 19-Jul $2.90-6.00/kg $2.80-6.00/kg $1.60-3.00/kg 26-Jul $2.90-6.00/kg $2.80-6.00/kg $1.60-3.00/kg Source: Freightos ©2017 IHS Markit

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