Air freight demand in North China — which includes Shanghai — remains low ahead of the Chinese New Year festivities, according to the new report by Flexport, as hopes of a cargo surge have likely dissipated with economic pressures continuing to temper consumer spending.

The freight forwarder said TPEB (Transpacific Eastbound) rates have dropped while Far East Westbound (FEWB) rates hold at low levels.

"Demand remains low, and a peak in volume before the Lunar New Year holiday remains unlikely," Flexport said on January 10.

It added that, as a result, some charters in the market have also been cancelled due to the low demand forecast while commercial flights continue to operate as scheduled.

For South China — Shenzhen, Guangzhou, Dongguan, and Hong Kong — demand and rates have decreased, and some factories have already begun taking off for the Lunar New Year.

But with the lifting of all Covid measures in mainland China, cross-border traffic is expected to gradually resume, Flexport said.

In terms of ocean shipping for Asia-North America, it added that TPEB rates begin to level with the approach of the Lunar New Year (LNY).

Rates to the U.S. East Coast (USEC) and Gulf Coast continue to see softening while the rates to the U.S. West Coast (USWC) are levelling off.

"Weeks 4 & 5 will see the bulk of the holiday blank sailings, with a possible capacity tightening expected around this time," Flexport said.

For Asia-Europe, Flexport said space is full, and there are a "considerable amount of rollings" in the lead-up to the Lunar New Year.

Rates also remain "more or less stable" compared to December but are expected to be under pressure again after the Lunar New Year period.

In terms of space, the freight forwarder noted that space has constricted as a result of an increased number of blank sailings and improved demand.

For the Europe-North America lane, Flexport said in its report that space is available to both USEC and USWC ports as congestion has improved markedly and more capacity has entered the market.

Rates, meanwhile, continue to see a downward trend.

"As capacity has increased and demand dips into negative territory, rates are set to decrease in the months to come," the freight forwarder said, adding that due to the easing of congestion, space in USEC and USWC is becoming available.