Ocean freight market update
China-North America
- Rate changes: Ocean freight rates have experienced moderate increases over the past week. Rates on the China to US West Coast lane rose slightly, while the China to US East Coast lane saw a more pronounced increase. Despite these upticks, the pace of rate hikes has begun to slow, indicating that prices might have reached a peak. Some carriers are starting to offer rate reductions to keep vessels full, suggesting potential downward pressure on rates in the near future.
- Market changes: The overall market remains dynamic, with several influencing factors. The addition of more capacity on the transpacific routes, including new entries by regional carriers, is impacting rates. Meanwhile, strong US import volumes, driven by retailer expectations of consumer strength in the fourth quarter, are likely to peak in August. However, potential disruptions, such as labor strikes on the East Coast and Gulf ports, and congestion at certain US ports, may affect market stability.
China-Europe
- Rate changes: Rates on the China to Europe lane have been relatively stable, with minor increases observed in recent weeks. Inflation and high inventories in Europe are contributing to a flat demand, leading to rate stabilization. Carriers are planning another possible general rate increase (GRI) for September, coupled with more blank sailings to manage capacity.
- Market changes: The European market is adjusting to a significant influx of new ultra-large container vessels, which is expected to temper rate increases. Utilization levels on the Asia-Europe trade have dipped, and the requirement for shipping holiday season goods by the end of September could bring an early close to the peak season. Additionally, high freight rates are pricing out some lower-margin shippers, reducing overall demand.
Air freight/Express market update
China-US and Europe
- Rate changes: Air freight rates from China to North America have remained steady, while rates to Europe have shown minor increases. Strong e-commerce volumes continue to support elevated rates, especially from Asia Pacific origins. Despite typical seasonal lows, the air cargo market is experiencing high rates due to persistent demand and limited capacity.
- Market changes: Global air cargo demand dipped by about 5% in early July, largely due to the US holidays. However, rates from Asia Pacific to the US and Europe remain significantly higher year-on-year. New air cargo services, such as those introduced by China Cargo Airlines to Budapest, are enhancing trade links but also contributing to capacity changes. The ongoing high demand for e-commerce and general cargo is expected to keep pressure on space and rates through the end of the year.
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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