Name: European Freight Market Update | 5 May
Uploaded: 2026-05-06T09:22:52.271Z
Duration: 45 min 27 s
Description: European Freight Market Update | 5 May

Transcript for "European Freight Market Update | 5 May": Hey, everyone. Thanks for attending today European FMU. My name is Guillaume. I'm head of ocean for EMEA at Flexport. I'll be your host today. But as usual, before we dive in into the topics of the day, we should go through a few housekeeping notes to help everyone getting oriented in that webinar. So on your screen, you'll see a sidebar to the right, and where you can submit the questions that you have for the webinar. At the end of the presentation, it will take some time for q and a q and a and to take a few of those questions, try to address them. On the same sidebar, you will see a tab that's called docs. This is where you can download a copy of today's slides. Good. Second notes now. Legal disclaimer. Keep in mind that all information we'll be discussing today is based on the situation at this current time, and this might not be customized to your specific business requirements. So we always recommend you to reach out to your Flexport representative or to a Flexport expert to discuss your particular situation. Alright. So these are the speakers that will, be on stage today. So myself on the left that you see, I'll be speaking through the ocean market updates. We have Ivana with us who will tell us about all you know all you need to know about customs, and we have Hong Kong who speak about air. So we hope we'll cover most of your concern today with that team. And with no more waiting, we will start with the air freight update with Franco. Franco, tell you. Thank you, Guillaume. Good afternoon, everyone. Welcome to today's effort update. My name is Franco, and I'm a senior pricing associate for Central And South Europe. Let's, dive in, and as usual, let's start with our overview of what's going on in the market. Looking at the demand first, the year on year volume growth in April recovered to plus 2% after a contraction of 4.8% in March. This contraction was mainly driven by seasonal factors, such as the post lunar new year volume drop, but mainly due to the Middle East escalation. Turning to the supply now, the capacity in April, grew by 4% month over month, and the largest recovery, was on the Middle East Asia corridor. This happened as, Middle Eastern carriers are injecting more capacity into the market. And currently, depending on the airline, they're operating at approximately 70% of the capacity levels pre conflict. Looking at the rate level, the global spot rates increased 30% year over year in April, and prices reached the highest level since October 2022. These new highs were mainly driven by the contraction in available capacity paired with very strong demand. Moreover, in China and certain Southeast Asian countries, we also had some holidays between the April and the May, which further contributed to this spike. Finally, the outlook for q two. We could say we remain cautiously optimistic since the increasing capacity is usually correlated with price relaxation. However, volatility still remains extremely high. Moreover, jet fuel price fluctuations and jet fuel shortage still pose a key risk that might affect the markets. If we now turn to Asia Pacific to Europe trade lane, the rates in April continued their upward trend fueled by limited capacity and strong EI related products and e commerce demand. On a positive note, however, the Middle East to Asia capacity recovered by 30% and the capacity from Middle East to Europe by 14%. So this is very good news, for first westbound as, an increasing capacity usually means, a relaxation in prices. However, forest westbound will still be highly dependent on the Middle East escalation. And here, we would like to propose two possible scenarios. So if we look at the first scenario with a quick resolution, we might be looking at a market with recovering capacity and softer demand, and ultimately also jet fuel prices will decrease. And all of this would pose the condition for, softer market prices. However, on a on a different scenario with continued disruption and, further escalation, we might face again space closures and definitely, again, an increase in jet fuel prices. Moreover, Middle Eastern carriers will have to reevaluate their capacity deployment. So it is very important that you discuss with your current logistics provider if you have any specific traffic or any specific business tied to Middle Eastern carriers carriers, in order to check, if you have any exposure and in case you can, prepare some contingency plans accordingly. Turning now to the Transatlantic, summer has finally started, and this is very good news because, with summer schedule, we usually have an influx of passenger flights into the market. And more passenger flights, mean an increase in belling capacity, which, translates into, an increase, in space for cargo. As a matter of fact, if we have a look at the Transatlantic westbound, so the trade lane from Europe to The US, this recorded a 10% increase month over month. And at the same time, while rates differ significantly lane by lane, overall, we've seen decreases approximately between 1015% in April compared to the March levels. So, as you know, summer is traditionally, a slower season with a market, which is pretty much in balance in favor of capacity, and therefore we usually have soft rates. However, we also have to keep in mind that, the Europe and US, tariff policies are still quite uncertain. And in case, The US were to implement new tariff towards Europe, we might see an acceleration in the decreasing trend in prices on this trade plan. Now, as usual, before we conclude, we have a few recommendations for you. As I just said, q two is all about scenario planning. So please, keep monitoring closely the jet fuel price developments to make sure your whole organization is aware of possible impacts. At the same time, prepare contingency plans according to the evolving Middle East situation, and consider reviewing, the validity of your tenders or even postponing, and adjusting your procurement cycle in order to take advantage, for instance, of the spot market on those trade lengths where conditions are more favorable. Finally, consider also alternative solutions. Here at Flaxford, we have several creative solutions to mitigate increasing cost and at the same time, to mitigate extended lead times. We have several CR solution and options we can offer. So please reach out to your local Flexport representative to explore, what options might be more suitable for your supply chain needs. Thank you so much, for your attention. I will now leave the floor to Guillaume for the Ocean update. Thanks, Franco. Yeah. Let's move on the ocean updates. What I want to do today is cover a bit what's happening around almost. Right? It's on the headlines of order and shipping news for the last, couple of months. So I want to summarize again where where we are today or where we are not. Dive a bit on the impact of this whole crisis in the capacity, on the congestion at port, and also on the fuel prices and everything that's infuriating surcharges because there's a lot of that out in the market. So I I want to shed some lights on what are those and how you should be looking at those, in the coming few months. So we'll do that, and then we'll go through more regular updates, reviewing capacity developments, service reliability, and and pricing, developments on US, trade and and European ports, European ports from Asia. Alright. So let's start with, the elephant in the room, the Strait Of Hormuz. So I've seen that image passing through my feed on LinkedIn at least a dozen of time. I don't know who is the first who build that or shared it. If anyone in the call know, feel free to add in comments so we can give the proper shout outs. But I I think it just defines pretty well where we are in today's. Like, every day, there's a new update. So first, the the the Strait Of Armuz was was blocked. When the conflict erupted. Then it was supposedly opened during ceasefire, in effect that didn't really happen. Now there's two countries claiming that they are imposing a blockade in the region. So it's definitely closed. It's changing every day. There's a lot of noise in the news about that. The fact is today, there is very little passage, on on in almost, and there is very little regular service going through. So our moves is not safe pass passage for containership, and we should not count on a change in in the coming few weeks. If we go then on the next, slide, like, what does that mean for the capacity that's in the Arabian Peninsula and the Arabian Gulf? There are still a lot of waste that are stuck there. So I put a screenshot of what we have in Flexport Atlas. That's a tool we have where we can see where vessels are real life, at least when their AI AIS are turning. And you can see that in in this gulf, you have see so at the time of that screenshot, 66 vessel that we are stalled. So not moving within our birth plan. Next. That's pretty much in line with the latest number of rates from Alpha Liner. So, it was, like, ten days ago, Alpha Liner was counting around 60 vessels to all in the Arabian Gulf. Those vessel represented at the time around 300,000 TUs capacity being blocked and stuck in in that gulf. Right? So that's capacity that is not available to move cargo, out there in the shipping markets. Capacity is not the only one to suffer from that. Of course, there is less trade flow in the region. So what we did is we actually look at the number of TUs that are transiting every month in the small square you see on the picture. So, like, that's that's the straight off, almost, of course. So when we look at and you can see in the screenshot is the on the blue graph on the left side, you can see month over month, number of TUs that were going through that, blue square. Back in January, so before the whole, the whole conflict erupted, we were seeing more than 3,000,000 TUs transiting in that straight amount. And if you look at April, well, the total amount has been reduced by less than a tenth of that previous amount. Right? So most of the trade has has stalled in that area. But it's important to notice that, like, most of the time, those bugs, they don't start, they don't go, they don't come overnight. So there's a lot of cargo that was bound to Middle East, to this also Gulf. There was in road to there that had been stopped and that had to be rerouted last minute, which led to another problem we've seen in the region, is port congestion. So we've checked on that. I put a screenshot from Zeneta. They have, like, a nice congestion tracker as well where you can see a simple visual where you see the main ports and and what's the congestion level today. And if you zoom in into the Middle East and the Indian Subcontinent, so all the area that surrounds, the conflict zone today, you see that many of the main ports are either red or orange, which means there is moderate to severe congestion today. So there's a lot of ports where shipping line had to offload the containers that were bound to Middle East, either because there were no place to bring them anymore or because they had to discharge and find alternative intermodal routes to bring the cargo to destination. So that piles up congestion. And what is important is that congestion is also sucking up capacity out of the market. So today, it's expected that around 5% of the global capacity is basically tonnage that is waiting for bus slots in front of a port. So that's, again, as many TUs that you don't see moving cargo around the globe, so that's taking capacity out. And you will see that for most of the ports in the region. We can also zoom in Flexport Atlas. There is a congestion tracker on the port level where you can see. So if you're a flexible client, you have access to that. It's easy to see. It's just it's online. You can see the congestion building up, so the number of type of days that vessels are waiting at ports. So I put two example from the area, Soa and Jeddah. Soar is very close to the Strait Of Armuz. It was used to drop a lot of container, when the Strait was first closed, and you can see that from April, the dwell time quickly increased in the in the ports. So it's just the vessels are waiting longer to find a birthing slot, and it has then stabilized but at high level since then. You also see JEDA today is a good example because it's being used as an intermodal hub by by some shipping line where they will bring the cargo via, the Red Sea, unload the containers to Jeddah, and then routes to the final, destination closer to the Gulf via intermodal roads. So rail truck, most of the time. And here as well, you can see that the dwell time has been increasingly, going upward, in the next in the last few weeks, and it has yet to stabilize. So almost close today. Congestion is there on the surrounding parts, and there is definitely capacity taken out of the market because of all of that. We don't see this being solved in the coming weeks. We do expect this region to remain very fluid, with a lot of noise, but, in fact, just not much happening, to unlock the whole, the whole the whole trade flows in the region. Now if we jumped on the fuel impact, it's important. So the graph you see is the average loss with your fuel costs from ship and bunker since, last year, and it's pretty clear there was some kind of an increase, since March. So it's closely linked to the brand and to the fuel, cost development. If you look at the barrel of brand today, it's being traded around a $115 per barrel. Pre crisis, the average was around $60.70 dollar. So that's 75% increase. Those number take that with some, pin set because they change every day, but that's that's a substantial increase. And that materializes indeed indeed in a fuel cost increase for shipping lines. So the loss of fuel cost is the main one being used today. The the current prices are $900 a ton, per metric ton. Before the homeless crisis, the it was around $500. So it's a substantial increase. You if you move cargo today on the oceans, you must have seen curated surcharge coming up somehow either via the increase of floating rates or via some surcharges being applied to your contract. It's difficult to read because all shipping lines have different approach to it. So some decides to impose surcharge, ad hoc surcharges. They will call it emergency banker fuel surcharge. They will call it emergency fuel surcharge. They will call it eBAF. Whatever those surcharge are ad hoc and they apply on top of a contract, whether it's a floating or long term contract. But some of the shipping line, just decided to change their bath formula. They move from a quarterly to a monthly bath, or they adjusted the formula according to which they reviewed the bath and the cost of that bath already increased mid mid validity. So that's another way taken by some carriers. Some of the carriers will just decide to increase the ocean baseline, in the contract you move your cargo with. So it's not a surcharge. It's not a bath, but just you pay a high ocean freight, right, today. There is a lot of the surcharge. It's difficult to read, and when it happens, it's super difficult to compare apple with apple. So what's important to do at the moment for any shipper is to understand what's your freight rate are subject to. It needs to be explicit. You need to know what are your charges that will come on top of your ocean freight rates. Ask for the taxonomy, ask for the name, ask for the amount, and ask what is it inclusive of or what is it subject to. So it's the first thing. The second thing is that you need to understand what's the frequency that, you need to look at for those surcharge to be reviewed. If you look at the normal traditional bath on fixed term contract, it's really being being reviewed every quarter or every month depending on the shipping line. If you look at tracking fuel surcharge on internal move, it's often every month. But if you look at emergency related surcharge, a bit more ad hoc, those are often reviewed on a weekly or biweekly basis. So it's important for you to understand how those, are being tackled by the shipping line or by the forwarder you work with. What we expect also for the coming months, well, more volatility. We will see the the the brand price going up and down, following the announce that we will see in the news. If there's more ceasefires, we might hope the fuel price goes down. If the conflicts takes over again, then the fuel price will go up, but we should expect some more ups and down in the coming months. But it's important to know that overall, we will remain on a pretty high level. The the the oil price have reached its highest point in the last ten years. It's now as high on I think it surpassed even the peak that it reached after Russia invaded Ukraine 2022. So it's it's a very high level. If you look a bit further towards q three, what you can expect, if you have floating contracts, it's a bit easy because you most of those surcharges are blended in your in your floating rates. But if you have long term contract, fixed contract, you will see two different behaviors depending on the shipping line you deal with. Some will probably sunset the emergency fuel surcharge because they will update the quarterly bath, and the quarterly bath will take into account the new market rate with higher, higher banker costs. So at the same time, we can sunset, your emergency surcharge. Some other, will maybe have a bath that doesn't account for this oil increase, and they will maintain EPS. So so it's important to also stay tuned on what you will procure there. But if you follow normal bath mechanism that look at this cost per metric ton, What we see today is that q two, on which most of the carrier bath formula will be calculated, q two is an average 80 to a 120% higher than q one. Right? So carriers usually look at the quarter before to calculate a new quarterly bath. So if that if they don't touch their mechanism, you should expect an increase that's that's in the round of the 80 to 120%, of that formula. We're still in mid, so it's still a month and a half to go, but that's what we see today. Alright. So with this deep dive being done, I want to go through in reliability numbers that we see. I put in that graph different, reliability metrics from, the global line of performance on the main, trade we are talking today. So Asia to North America, Asia to North Europe, Asia to Lithuania, and and and Transatlantic westbound, so Europe to, to, to North America. What you see is well, Transatlantic westbound is still pretty low, 46%, reliability. It's it's really low, but, also, it come from far. This this trade has suffered a lot of weather issues back in January and February, so it's catching up on on the number. But all the otherwise major West, East West trades are on the 55, 60% performance, and it seems to be a ceiling for the last two or three years, that we cannot break. So pre COVID, the average was around eighty percent. Now we struggle to go beyond sixty percent, and we don't expect this rarity number to go much beyond that on short term. Why? Because there's so many crisis happening that carriers are forced to adjust their services again and again. And the more you adjust, the more you mess up with your with your with your schedules and your plans. Second is Cape of Good Hope service and transit is still the norm. And the longer the routing, the more risk of delays. And, also, there is more often weather issues, around South Africa than there is, via the Red Sea. So so that's also since the Red Sea, that's also consistently impacting negatively, the on time performance of the services that go between Asia and and Europe. There is a port congestion topic we mentioned earlier. Higher congestion means poor, service reliability, and there is also the fact that carriers are managing their capacity much more dynamically. So they are faster to allocate capacity from a trade to another, looking at the demand where it requires, to move cargo to. And they also blank out when needed when they see a soft market. But, of course, whenever they do that, the rarity drops. The reliability drops. So we will expect a big improvement beyond the 60% mark, on on the rate reliability number. Sorry. Now on the capacity development, I want to give you quick, hints on how to read the different events that you see and, to guess how they impact the capacity. So you understand a bit how the offer in the market works. So on the left side on green, you see updates, events that are releasing capacity in the market, that are adding available capacity in the market. So I put two example. CMA, for instance, we're rooting one of the of the service that they have between Asia and and North Europe. OceanRise Xpress is running between Japan, and to North Europe. Just as it's only one of the of the many service that you have on five SwissBond. But if shipping line were to do that more, to route more cargo just to instead of capable capable of, then you cut the transit time. That means then you need less vessel to run the same loops, so you release capacity in the market. Also, the new vessel deliveries. Shipping line adding between 7% of new capacity, this year in the market. They will add another nine to 10% in the next two years, so it's substantial. Those are new tonnage that come in the market that will bring capacity. But on the other hand, you have the red box, which are events that take capacity out. Right? So we said earlier some vessels are stuck, in the in the Persian in the Arabian Gulf. We said also congestion is taking around 5% of global capacity today. We also mentioned the low reliability numbers. It's expected today that, the reliability globally at 60% versus 80 pre COVID has a negative impact of 5% of the total fleet. Right? Why? Because if you're not reliable, it takes you longer to run a service. If you need more time to run a service, you need more vessels to do so, and you need to add capacity to it. Slow steaming is important. With the fuel prices going up, the vessels are going a bit slower. So Alpha Liner made analysis recently on that. They calculated that globally, the vessels have slowed down from 0.4 knots between the beginning of the crisis and today. That doesn't seem a lot. That's a 2% speed reduction globally. The 2% speed reduction means 2% less capacity. Right? Because you're so it takes you longer to go from a to b. And the last one are blank settings, carrier managing capacity, and when there is a slack period, they also take capacity from the market. So we see that on FICE was born today. The market has softened a bit the last month. And in May, around 10% of the capacity between your organization is being taken out by the shipping line. So that's those two simple box help you understand a bit better why we don't always see the overcapacity that we often read about in the media. Kicking it fast is because there's a lot of counterweights that impact negatively the capacity available. And overall, shipping line load factors are not that bad. And that's also explain why the market price is is still steady, today. Briefly on US, and then Europe update markets. So if you look at The US, RFP season has closed. The left graph, you can see the development of global demand global containerized demands to North America versus rest of the world. You can see a semi decoupling versus last year, Liberation Day, tariff implementation. Even I will take a bit more about all those topics, but we saw less volume going to The US. Despite that, the the shipping market has hold pretty well the last few months. So it was pretty bad last year. The peak season or so, Chinese New Year peak season on TP was pretty weak, compared to last few years. But the last month, we've seen the market trending up again. You see on the right graph, the CFI, the Shanghai Contourized Freight Index, slowly but surely going up, from Asia to to The US East Coast and West Coast. And we see an even more brutal, effect on Transatlantic Westbound. There is no vision on this one, but this second market from Europe to The US, I've seen a massive price surge, since April. At that moment, shipping line currently both emergency vehicle surcharge, but also a lot of them peak season surcharge. Q two is often a big quarter on request bond, but we also saw that several shippers anticipated, a cargo rush. Like, can they push cargo out to, sorry, to first basically anticipate potential new tariff from The US on on on European ports and also to potentially anticipate any new phenomenon. So there is a risk of, like, new storm happening, which is between May and July. And to avoid that, some some cargo has been expedited in Europe, or already now. So we've seen truck with one market going up, and is now, roughly 50% higher than the it was, before before March, April. Last but not least, on on Europe updates, so you can see that the Japan prices bond trade season, the air PCM is also closing out. So on that side, we don't see a massive adjustment year over year. The big difference in the contract for those of you that have standard volume is not so much on the ocean baseline. So if you compare April 2025 versus April 2026, the baseline is not drastically different. The big difference is, of course, the surcharges that are applying on top of those baseline, and those relates to the one I mentioned a bit earlier, around, either bath or emergency fuel and bunker surcharge. That's one difference. If you count the surcharge on, then the bid season on FICE Westbourne is, is is closing at substantially higher level than it was closing a year ago. If you look at the floating market now, so I put a graph here. That's the also the SCFI for Rotterdam, to, from Shanghai to Rotterdam. You can see that we started the year in '26 lower than last year. Last year was still basically normalization cost. Right? See, and then the market went down and was pretty soft in 2020, '5. We started pretty low in 2026, but since almost we saw the markets, increasing. In April, in average, the CFI has been 18% higher, than than the same period last year, which is a rough year $230 per two increase on on that same index, which is also pretty close for many banker surcharge we've seen being implemented around, by shipping line. So that somehow align with the floating contract, trends and the surcharge we see on on those fixed contract as well. Okay. So key takeaway on the ocean side, almost expect volatility to remain. We will see a lot of announcements now the trade is closed, and that the impact on the fuel market will remain, in the coming months. Understand your fuel surcharge. Make sure that you understand what's the taxonomy, what's the name, what are your options for it because you are are subject to, and what's the frequency you should expect revision, of the surcharge. For Azure Europe markets, it was somehow a bit soft lately, but the capacity remains pretty tight and we hear GRI coming through coming ahead May. Usually, summer peak starts around June, so we might see the market tightening up at that period. Suez transit. I mentioned CMA is going through Suez. It's an exception now. If more carriers announce rerouting their Suez, check out your insurance coverage and at the premium it covers, because details in the details, you might have an insurance coverage, but not have the war risk premium included. So check on that. And on The US side, it's pretty positive as Europe. The market is pretty the fundamental are pretty fragile. Right? US imports are done, since the burst in the last year. But at the same time, market price is pretty high, so we have to look if it can hold, steady at those level in next few weeks. Alright. That was a pretty intense update. But on that, I can leave the floor to Ivana for a custom update now. Ivana? Yes. Thank you, Guillaume. And, good afternoon, everybody. I'm Ivana, customs manager at Flexport, and I'm going to take you through, the custom section. There are two, customs topics, for today, both relevant if you're importing, into The US or into the EU. First of them, escape. That is the new system for reprocessing of the IEPAA refunds. And second topic, is CBAM, which is relevant if you import, into the EU. So let me first start with Cape. What is it? It is effectively US Customs answer to the question on how do we manage all the IEPAA refund claims. And the portal went live on the April 20. And if you haven't started yet or you're in the stages of figuring out whether this, applies to you, I want to make it very simple for everybody. If you paid, IEPAD duties, you are eligible. And if you imported to The US, you most likely, did pay them. So we have a lot of, dedicated webinars about, US tariffs, where we dive deep, into the topics. So I would definitely recommend to everyone, to also join those. And for today's webinar, I just want to make you aware of this, refund process and go through four practical steps, to get you, through CAPE. So let's start, with, step one, and that is that you need to set up an ACE account. This is a US custom system where all your import entries, live, and you need to add a US, bank account, to it. If you don't have a US bank account, you can also nominate your customs broker, to receive the money, for you. Then we have step two is to find out how much you can actually request back. For this, you can also use the Flexport free tariff refund calculator, which can be found, on our website. And it actually just gives you a full synopsis of what you can expect, to recover, from these, refunds. Then step three is to review and audit your declarations, before you submit, through CAEP. The reason I say that is that you need to validate your data, before it goes in. Right now, across the industry, around 20% of paid submissions are being rejected, and some brokers might even, have a higher rejection rate. At Flexport, the rejection rate is 2.5%. So you also want to think about what does this mean for your business if 20%, of the, refunds are being, rejected. Because rejected claims, can also result in delays, resubmissions where the clock starts ticking from zero again, and potentially, missed deadlines. Then we have this last step, which is, of course, to submit, the refunds, through Kate. And here you want to decide, do you want to submit those by yourself, or do you want to, nominate a broker, for that? So if you work with Flexport, we can also act as your authorized representative and manage the submissions, on your behalf. We handle the filing, tracking the status, and, also, if you don't have a US bank account, we can receive the refund on your behalf and transfer it, to your, European account. Also interesting, to know is that, companies that have already submitted refunds in Cape could start receiving the first refunds around May 18. That is very soon. So if you haven't already started, I hope these steps that I just, explained, help you make a start, so that you also don't leave any, money, uncleaned. Now let's move on, to the second topic, of today, which is CBAM. This is relevant, for importers into the EU. And, CBAM entered its definitive phase on the January 1, this year. That means that, the obligation, is running, and I'm sure you have heard loads about, this topic. So for today, I just want to give you some, practical steps, about it. And, first of all, maybe just a very short summary. What is CBAM? CBAM stands for, carbon border adjustment, mechanism. And it is a EU policy, that is designed to put the fair price on carbon emitted during the production of certain products entering, the EU. And then those certain products, the targeted sectors are, iron and steel, cement, fertilizers, aluminum, electricity, and, hydrogen. And now if you're importing, those products, when do you need to do something? The first question that you need to ask yourself is, are you above or below the 50 ton threshold? If your total annual imports of seabed covered goods are under the 50 tons, you are fully exempt. So that means, no registration, no reporting, also no certificates. But I would also highly recommend to everybody to forecast and monitor your incoming flows, especially if, let's say, last year, you were at 40 tons or 45 tons. You really want to monitor that closely because if you would go above that threshold of 50 tons, then you will have, different obligations. So if you are then above the 50 tons, you need to be registered as an authorized CBAM declarant, and you have a yearly, reporting obligation and will need to buy, CBAM certificates. And then a very big thing also to focus on this year is emission data. And, as you might know is that the EU publishes, default values, and that is a set of standard, emission figures per product per country. You can use those default values. They are fully compliant. But it is also worth noting that the EU has deliberately set those values, very high. And the intention is very clear, to push importers to get real verified data from their suppliers. So in 2026, default values are set, 10% above actual emission levels. In 2027, that will be, 20%. And in '28, it will even be 30% above. So what this means in practice is that EU is then making those default values expensive enough that using real supplier data, is actually worth your while of getting that, information. So I would say the action, is very clear. You want to start talking to your suppliers, to get those real emission data, and also keep calculating your, exposure as you go. And don't wait until the end of the year to find out, what your, liability is. And then I would say a few final words, to wrap up the custom section. We have talked, about CAEP. So for that, I would recommend, to check your eligibility, audit your data, and file as soon as possible as you don't want to leave any money, unclaimed. On the second one, CBAM. So the financial clock started ticking in January, this year. So, monitor your, volumes. Are you above those 50 or below, the 50 tons? Get your supplier data as this will decrease, the CBAM cost, and do not wait until, 2027, to act as you don't want to be surprised next year, by the CBAM cost, that you might have to pay. Thank you. And that was the custom section. So now we will move on to, the q and a. Alright. Yes. Thanks, Steven. I think we have two question, that can end for air and ocean. Phone call, you have ready for air question first. I have so with the major European carriers like Lufthansa and KLM announcing flight cancellation due to the fuel crisis, how is the capacity being impacted? Thank you for the question, Guillaume. So there's a lot of concern around all the cancellations that have been announced, mostly by European carriers, but not only. And, we shouldn't be that much concerned, though, in terms of, airfield capacity because these cancellations are mostly related to, domestic and, regional flights, which are usually nonprofitable. So, these were the first that the islands, canceled in order to, preserve their net revenue. And, these flights are usually operated with narrow body aircraft. Therefore, there's no real impact on the on the cargo capacity. So this might be more of a concern for your holidays, but not necessarily for, for cargo. Alright. We also have one question for Ocean. And, Thanks. Guillaume, Paris westbound rates have now softened in April, but carriers are managing capacity dynamically. How should shippers with NAC contracts think about spots versus fixed allocations right now? Yeah. That's a that's a good one. So we there's two trends. So, indeed, April, the floating market has has has, has gone down. It has stabilized, though, at the April into May. If you look also at the SCFI, graph, if you could look again, you can see that the last two, three weeks were pretty stable. It increased actually last Friday. So so it's also like the the decrease in the spot market has to be, you know, put into bracket. We might we might reach the bottom already. This said, usually, what we recommend when when this floating market is coming down to, like, more or less the same level as the fixed market or sometime it's below the fixed market, which is normal. Right? In slack season, we should normally see floating market going below fixed market and then the other around in peak season. What we recommend you should to do is leverage that to move your overflows. So So if you have a fixed contract, understand your weekly allocation. Let's say you move, I don't know, 10 to use 500, five five forty foot on a given lane on your fixed contract, then don't try to overbook and go on the spot in a floating market for your overflow volume. But we highly recommend to stick to your allocation on your fixed contract. Still, why are we saying that? Because carriers are are controlling more and more their location performance. Meaning that if they see you not performing in sex season, they might use that to right size your allocation later on for peak season. We're seeing some GRI coming in at the May. We will see the floating market on forest waste bound trending up either late May, latest in June, anyway. At that moment, guys will take action to, to enforce strict NAC allocation. If you if you haven't performed during Slack period, then they will use that to to right size your allocation. So we really recommend even when the spot market is low, stick to your allocation, perform, but then use the floating, rights for your overflow volume. Okay. I think that's gonna be it for today, and we are gonna be on time. So thanks a lot for your time today. Thanks, Ivana. Thanks, Hong Kong, so for the updates. Thanks, Ivana, for attending. You will all receive an email, with a link to the recording tomorrow. Thanks. Have a great day, and be with us for the next webinar. Bye. Thank you for the attention. Goodbye.