Air freight demand in North China — which includes Shanghai — remains low, according to a Flexport analysis, which noted that due to low demand in the market, commercial flights have been cancelled to reduce the supply imbalance.
The freight forwarder said in its November 29 analysis that rate levels have also dropped from the previous week, however, the low demand trend is expected to continue.
For South China — Shenzhen, Guangzhou, Dongguan, and Hong Kong — market rates remain at similar levels to last week.
Flexport said the Covid outbreak in the Guangzhou area continues to affect manufacturing operations, resulting in cargo output delays.
For Taiwan, the report said there is a slight peak before the month's end, particularly to LAX and FEWB destinations, but for Korea, the market remains soft for the month's end.
For Southeast Asia, Flexport said the overall export markets in Southeast Asia continue to be soft with rates either maintaining or dropping slightly from last week. In effect, in Vietnam, some factories have begun laying off staff or updating work schedules to rotations in order to save costs.
For Europe, Flexport said overall, demand levels remain constant and below expected levels for this time of the year, with small spikes on certain main port pairs like AMS-JFK.
Capacity available in the market has also decreased to usual Q4 levels, but it remains sufficient to meet current demand.
For the Americas, Flexport said export demand remains steady from all markets and U.S. airports are running at a normal pace.
Ocean freight demand, rates continue to drop
In terms of ocean freight, the freight forwarder said Transpacific Eastbound (TPEB) market experiences major drops in demand.
For the U.S., Flexport said TPEB demand continues to fall for nearly all gateways, substantially below volume levels seen pre-pandemic.
"Although carrier reliability is showing improvement, the fluctuation of physical vessel counts in the market continues to remain volatile as carriers work to find methods to deal with overcapacity, mainly through blank sailings," the report said, adding that remain soft on most origin-destination combinations.
For Asia-Europe (FEWB), Flexport said demand continues to be weak going into December with no sign of improvement.
Rates are also still following a downward trend and space is readily available but schedule reliability is affected by port congestion and delays.
The freight forwarder noted that there's ongoing pressure on spot rates due to low demand, although space is generally open with few blank sailings.
For North America-Asia, Flexport said capacity, congestion, and equipment have all improved amid a continued drop in market demand, but rates have not fluctuated much.
"All services to APAC have low capacity utilization levels with no space constraints," the analysis said, adding that congestion has been cleared out across most North American container yards with improved operations as a result of less demand although congestion does persist in limited pockets around the Gulf and South East Coast.
Flexport said the rail performance in a few key markets: Chicago, Dallas, and Kansas city, has also seen improvement.
"The looming railroad and ILWU contracts negotiations will play a huge role in dictating the operations and congestion at container yards across the continent," the freight forwarder added.
Meanwhile, rrates - the floating market rates are not fluctuating anywhere near as rapidly on the outbound trades as much as the inbound trades.
Flexport noted that rates are trending slightly downwards month-on-month and quarter-on-quarter on certain lanes from coastal ports (USEC, USWC) to Asia base ports in China, Japan, Taiwan, S. Korea. Other lanes are displaying stability in rate levels.
"No major capacity changes in the market with very limited blank sailings as carriers prep for Lunar New Year," the freight forwarder added.