COVID-19 increases yields but revenue leakages abound!

Industry thought leader Al Benki reviews major COVID-19 observations impacting carriers

  •  Total TEU and shipment volume of 2H 2020 vs 1H 2020 are up. Demand continues strong due to:
    • Continued restocking demand
    • High demand for “stay at home” goods/PPE
    • Pre CNY rush
    • Limited Air Cargo capacity
  • Revenue yields are up
    • Capacity constraints and strong demand significantly drove up revenue yields in 2H 2020
    • Demand remains strong. Hard to get space on premium service before CNY
    • Constantly changing rate levels remain at their highest and are holding
    • Increased trade imbalance and container shortages
  • Pricing has increased in complexity
    • More spot and/or FAK rates application instead of contract rates
    • Application of Premium Space Guarantee surcharges
    • Increased differential between VOCC and NVOCC market
  • Revenue leakages have increased significantly, as have invoice adjustments, due to
    • Increased pricing complexity
    • Increased frequency of pricing changes
    • Fewer staff at the local terminals to validate data capture and pricing
    • Fewer staff at corporate to validate & process exceptions
    • Virtual work environment

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