Shipping between Asia and Europe continues to be muted as demand remains sluggish with no Pre-golden week cargo rush — further dragged by low demand and port congestion in some of Europe's major gateways.
In its latest analysis, Flexport said there is ongoing pressure on spot rates due to low demand.
On the capacity side, it added that space is available, despite schedule reliability continuing to be affected by a large number of blank sailings, vessel sliding, and port omissions.
No pre-Golden week shipping rush
"Demand remains sluggish with no pre-Golden Week cargo rush," Flexport said in its freight market update on September 27.
"Serious port congestion in Europe, particularly Hamburg and Rotterdam, is causing further delays and late return of vessels to Asia," it added.
For Asia-North America, the freight forwarder said rates remain soft on most origin-destination combinations.
"Soft pre-Golden Week demand indicates a lack of traditional peak season —expect capacity reductions to follow," Flexport said.
For the US, it added that floating market rates leading into Golden Week continue to "trend downwards" — despite upcoming blanked capacity —prompting speculation about how rates might develop in the second half of October.
It added that port and inland conditions are stable as transit times continue to see improvements.
For Canada, Flexport said market and rate conditions mirror the US on Transpacific Eastbound (TPEB), although substantial delays persist for vessels berthing at Vancouver and Prince Rupert, although both are seeing incremental improvements.
For Europe-North America, the freight forwarder said capacity is expected to outstrip demand in the fourth quarter of 2022, as carriers are likely to introduce more tonnage in the Transatlantic Westbound (TAWB) trade in view of attractive Dollar/nautical mile revenues.
Flexport said this capacity increase is likely to put downward pressure on freight rates in the upcoming weeks.
"For the first time in months, we are seeing signs of rates dropping slightly, just not at the same pace as other trades. Most Q4 FAK is an extension of Q3 rates," the report added, noting that space is still very tight on the US East Coast (USEC) with some space open for direct routing to the US West Coast (USWC).
Air cargo demand also weak ahead of Golden week
Meanwhile, in terms of air freight, Flexport said in North China — which includes Shanghai — demand is weak prior to the Golden Week holiday and TPEB rates increased slightly from last week while Far East Westbound (FEWB) rates remain the same.
For South China — Shenzhen, Guangzhou, Dongguan, and Hong Kong — Flexport said rates continue to drop in response to low market demand.
For Europe, the freight forwarder said demand remains low and capacity available in the market continues to exceed current demand levels.
"Over the coming months, expect capacity to drop and rates to rise as passenger flight frequency decreases," Flexport said.
For the Americas, it noted that export demand remains steady from all markets.
"Demand to Hong Kong has seen a large increase," the forwarder said. It added that US airports are running at a normal pace.
"Capacity is opening up further, especially into Europe, where most carriers have increased the number of passenger flights for their summer schedules."