Ocean freight market update
- Rate changes: While spot rates from China to the US west and east coasts remained largely stable during the last month, daily prices are showing signs of increase since the beginning of June when the ILWU-PMA negotiations broke down. On the other hand, long-term ocean freight rates saw an unprecedented slump in May, with the contracted container cost diving 27.5% according to a shipping data provider, marking the first time long-term rates have recorded a year-on-year decrease since late 2020.
- Market changes: The latest breakdown in the negotiation between US port workers and the maritime association has led to slowdowns at many terminals in Long Beach, Oakland, Tacoma, Seattle, and a shutdown of Long Beach’s largest container terminal until early last week. Prolonged operation disruptions will cause delays in container movements and increase in storage fees at terminals, as well as possible port congestion, which, in turn, will put upward pressure on freight rates. In China, post-pandemic reopening is ongoing and is expected to continue through the rest of the year, with ocean capacity widely available.
- Rate changes: The average spot rates from Asia to both North European and Mediterranean ports seem to be settling in recent weeks, with only a slight tick-down recorded in both lanes in the past few weeks. The price indices continue to show the easing of rate erosions from the soaring levels of a year ago.
- Market changes: The strikes in France affecting operations at some ports eased up and operations HAVE RESUMED to their usual levels. In macro trends, a survey by Alphaliner revealed that many top carriers had reduced their fleets between Asia and North America, and some deployed the majority of that capacity to the Asia-Europe route.
Air freight/Express market update
China–US and Europe
- Rate changes: Air freight rates continue to grind lower so far this year and May was no exception. Continued resurgence of air capacity from more flights returning for the summer season and weak demand contributed to market declines.
- Market changes: Air freight will likely hit rock bottom within the next few months, according to industry analyses. Many of the same factors impacting ocean demand are affecting air freight even more with additional summer capacity. The only bright spot in the air market is yields, which are still higher than the pre-pandemic level.
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