Air freight demand between north China — which includes Shanghai — the U.S. Midwest and U.S. East Coast (USEC) destinations "remained low" according to the latest Flexport analysis, but such is not the case for demand to the U.S. West Coast (USWC) due to a surge in e-commerce shipments.

The freight forwarder said rates to the U.S. Midwest and USEC have dropped slightly and rates to the USWC and FEWB destinations maintain at similar levels to the prior week.

"Demand remains low to U.S. Midwest and USEC destinations, while USWC capacity is a little tight due to an increase in e-commerce volume," Flexport said, adding that Far East Westbound (FEWB) demand is also keeping steady.

It noted that the resumption of Air China will freighter services ex-Shanghai Pudong (PVG) from this month is also expected to bring a large amount of additional capacity to the market.

 Source: SEKO Logistics

For South China — Shenzhen, Guangzhou, Dongguan, and Hong Kong — Flexport noted that TPEB rates continue to drop and charter cancellations are prevalent due to the soft market.

On the other hand, FEWB rates remain stable and new charters have been added to the market.

"The South China market has also seen some more demand coming from e-commerce clients," the report added.

Meanwhile, the overall export markets in Southeast Asia continue to be soft, according to the freight forwarder.

It added that this is due to strong demand at certain transit ports (CAN, TPE, etc.). Rate levels have also not decreased.

Asia-North America TPEB rates "approaching floor"

For air freight in Europe, Flexport noted that "demand out of Europe is stagnant." 

There is also "ample capacity" available in the market and rates are expected to rise slightly as passenger flight frequency decreases due to winter flight schedules being introduced as of November.

For North America, Flexport said export demand remains steady from all markets and US airports are running at a "normal pace." It added that capacity is also opening up further, especially into Europe.

In terms of ocean freight, Flexport said for Asia-North America, Transpacific Eastbound (TPEB) ocean rates appear to be "approaching their floor" with recent November and December peak season surcharge (PSS) and general rate increase (GRI) announcements from carriers.

"Although carrier reliability is up YoY, port and rail congestion is still seen at the major US gateways. Most notable at Houston for vessel dwell (17-20 days) and Los Angeles/Long Beach as rail dwell (14 days)," the freight forwarder said.

For Asia-Europe, Flexport noted that demand has somewhat recovered but remains slow. Space is also readily available but schedule reliability is affected.

The freight forwarder added that port congestion in Europe continues to cause delays and late return of vessels to Asia.

The ongoing pressure on spot rates is also driven by low demand.