Ocean freight market update
China–North America
- Rate changes: Over the past two weeks, spot rates for shipping from Asia to North America have persistently decreased, affecting both the west and east coast routes. Notably, the east coast rates have dropped to nearly 20% below the 2019 (pre-COVID) levels. This decline can be attributed to several contributing factors, such as the recent holiday in China. However, the most prominent drivers behind this trend are the ongoing reductions in shipping volumes and the surplus capacity in the market.
- Market changes: Industry trackers have reported that all major ocean alliances are poised to blank a substantial number of sailings in major trade routes until mid-November. This decision stems from the need to curb the decline in rates due to persistently low demand. More than half of these blank sailings will be in the transpacific eastbound lanes, with an additional nearly 40% affecting Asia to Europe routes. Despite these measures, the prevailing challenge remains unchanged: the supply-demand imbalance. This challenge is further exacerbated as new capacity continues to enter the market, exerting continued downward pressure on rates.
China–Europe
- Rate changes: The already troubled Asia to North Europe and Mediterranean shipping lanes witnessed further deterioration in their spot rates. The Asia to North Europe lane has seen its rates decline to nearly $900 per 40ft, marking a 10% drop in the latest week and reaching an exceptionally low point. Even the carriers’ recent announcements regarding aggressive FAK rates for the Asia to North Europe lanes beginning in November, which entail doubling the current spot market rates, appear to have had minimal impact in curbing the ongoing rate decline.
- Market changes: Ongoing trends persistently underscore the demand-side challenges that are out of sync with the deployed capacity of carriers. A diminished consumer spending capacity, attributed to elevated inflation and interest rates, combined with high inventory levels among both EU and US retailers, has led some industry executives to foresee the possibility of an even more pronounced downturn in rates in the months ahead.
Air freight/Express market update
China–US and Europe
- Rate changes: Over the past two weeks, there has been another noticeable uptick in global air cargo rates. Among these, the most significant have been observed in the Asia to Europe and North America routes. Building on the positive momentum that began in September, it seems that air freight rates may have finally hit their lowest point and are now on the rise into a peak season bounce.
- Market changes: Air volumes and rates saw an increase continuing from September, driven by seasonal factors, the ongoing growth of e-commerce businesses coming out of China, and a decrease in capacity. The air market has shown signs of stabilization in recent months after enduring a year and a half of consistent decline, displaying a modest seasonal resurgence. While a degree of skepticism lingers among some industry observers, others have become increasingly optimistic about the trend that lies ahead.
Disclaimer: All information and views in this post are provided for reference purposes only and do not constitute any investment or purchase advice. The information quoted in this report is from public market documents and may be subject to change. Alibaba.com makes no warranties or guarantees for the accuracy or integrity of the information above.
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