FLEXPORT: AIR DEMAND OUT OF ASIA IS LIGHT, RATE LEVELS HAVE DROPPED

 

Shipping between Asia and Europe is gradually recovering in the post-Golden Week period as factories have resumed work, according to the latest Flexport analysis.

 

 

Nonetheless, it noted that there is a significant blank sailing program in week 42 but in the weeks ahead not much capacity is expected to be taken out.

 

In terms of rates, Flexport said there's ongoing pressure on spot rates due to low demand.

 

"Space is readily available but schedule reliability is affected. Port congestion in Europe continues to cause delays and late return of vessels to Asia," Flexport said in its freight market update on October 25. 

 

For Asia-North America, the freight forwarder said rates in the Transpacific Eastbound (TPEB) market continue to experience reductions, paired with the current low demand.

 

However, it added that the carrier's attention to rates is slowly drifting away from the U.S. West Coast (USWC) and more towards the U.S. East Coast (USEC), Gulf coast and points inland.

 

Rates remain soft, however, on most origin-destination combinations.

 

 

"The port conditions on the West Coast are improving but are not back to pre-pandemic levels, where rail dwell and congestion still remain a major challenge," Flexport said.

 

Air cargo demand remains slow 

 

Meanwhile, in terms of air freight, Flexport said in North China — which includes Shanghai — demand is slow, especially for U.S. midwest and USEC destinations.

 

Rate levels have also dropped and may continue trending down into November.

 

For South China — Shenzhen, Guangzhou, Dongguan, and Hong Kong — Flexport said the market continues to be soft with rates maintaining at low levels.

 

Flexport noted that for Southeast Asia, the overall export markets "continue to be soft" as some origins return from the long holiday and for Vietnam, market demand is low but volume increases at transit ports may lead to some rate increases.

 

The freight forwarder said demand out of Europe remains at a low level.

 

"Expect capacity to drop and rates to rise slightly as passenger flight frequency decreases due to winter flight schedules being introduced (starting in November)," Flexport said.

 

For the Americas, it noted that export remains steady from all markets and US airports are running at a normal pace.

 

It said capacity is also opening up further, especially into Europe.

 

"There is a bit of a shortage of trucking capacity, as well as congestion at the airports, which is leading to a longer than normal dwell time for inbound cargo. This has been slowly improving and is expected to clear up in Q1," Flexport said in its analysis.