FLEXPORT: BLANK SAILINGS EXPECTED TO CONTINUE INTO THE NEW YEAR

Routine blank sailings between Asia-North America are expected to continue into 2023 as the carrier's solution to excess market capacity, according to the latest analysis from Flexport.

 

The freight forwarder said Transpacific Eastbound (TPEB) rates to the East and Gulf Coasts continue to soften, and carriers also plan more blank sailings for Q1 2023, most notably out of Vietnam.

 

"The goal is to curb excess capacity while continuing to improve schedule reliability," Flexport said.

 

It noted that the low TPEB demand had played a role in clearing some port and rail congestion, down from its peak over the summer.

 

For Asia-Europe,  the freight forwarder said there had been a positive increase in demand and booking intake from week 48. 

 

This combined with a higher number of blank sailings in the coming period will result in tighter space in the lead-up to pre-Lunar New Year.

 

Flexport said for this route, rates are still under pressure but not decreasing as dramatically due to a more balanced supply and demand situation. Space has also been constricted due to an increased number of blank sailings and improved demand.

 

For North America to 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," it said, noting that congestion has been cleared out across most North American container yards with improved operations due to less demand.

 

Regarding air freight, the freight forwarder said for North China — which includes Shanghai —  TPEB demand in the market is rising, and that trend is expected to continue through the Christmas holiday.

 

Rates have also increased compared to the week prior. Far East Westbound (FEWB) demand and rates remain stable.

 

For South China — Shenzhen, Guangzhou, Dongguan, and Hong Kong — Flexport said the market is picking up and space is starting to become congested.

 

"We recommend placing bookings earlier to arrange quicker uplift. TPEB and FEWB rate levels have increased in response to the higher demand," the analysis said, noting that due to heavy snowstorms in Alaska, some freighter capacity has been cancelled.

 

Meanwhile, Flexport said the Chinese government recently announced an easing in Covid restrictions so cross-border traffic is expected to resume gradually.