Mixed news in the supply chain over the past week has been impacting industry performance and outlook, with volumes, capacity and rates expected to further take cues from more industry developments moving forward.
Freightos said in its latest analysis that the downfall of US trucking firm Yellow, ongoing labour disputes and, on the other hand, more strength in the US economy is influencing the industry outlook this month — and moving towards the peak season.
"Yellow's last attempts to stay afloat in the face of mounting debt and an ongoing labour dispute fell short last week, as the LTL carrier ceased operations and will reportedly file for bankruptcy," the digital marketplace for international air and ocean shipping said.
It noted that Yellow is one of the US's largest carriers, and LTL rates are expected to climb in the near term as their capacity is removed from the market.
Freightos said the dispute causing the on-again-off-again ILWU Canada port worker strike appears — once again — to have been resolved as union members voted down a tentative agreement late last week, raising the prospect of a renewed strike until leadership accepted a revised proposal Sunday night, which will head back to members for ratification later this week.
It added that though operations have returned to normal since mid-month, the rail backlog built up over the shutdown could take up to two months to clear.
"More signs of US economic health in Q2, including consumer spending strength, are stoking optimism that inflation will be brought under control without pushing the economy into recession," Freightos said.
"This consumer resiliency contributed to estimates that US ocean volumes grew moderately in July and will climb into August, though some major forwarders do not expect gains through October to qualify as a true peak season," it added.
Judah Levine, head of research, at Freightos, said though Transpacific rates have climbed 13% to the West Coast and 9% to the East Coast since mid-July, "these increases are likely more a function of stricter reductions in capacity than of surging volumes as carrier work to reduce over-supplied fleets."
"There is less economic optimism in Europe and few signs of an imminent freight rebound," he noted, adding that even so, carriers will attempt a US$600/FEU Asia-N. Europe rate increase to start the month, "though the consensus is that this push won't succeed."
Air cargo not expecting a rebound in the peak season
In terms of air cargo, the Freightos head of research noted that forwarders are "likewise not expecting much of a rebound during the November-December peak season or a return to growth before 2024 at the earliest."
"Still-active long-term freighter charters leased while demand surged are — together with passenger travel growth — contributing to current overcapacity, pushing rates down as demand sags," Levine added.
Meanwhile, the analysis showed that the Freightos Air Index Global benchmark closed July level with June but 29% lower than a year ago.
It added that China-N. Europe rates ticked up 2% to US$3.09/kg in July, and China-US prices were at US$3.94/kg, for a 4% increase, but 31% and 47% lower than a year ago, respectively.
Transatlantic rates fell 11% to US$1.79/kg, about 40% lower than a year ago.
In terms of ocean rates based on the Freightos Baltic Index, the analysis noted that Asia-US West Coast prices (FBX01 Weekly) increased 12% to US$1,527/FEU; Asia-US East Coast prices (FBX03 Weekly) climbed 3% to US$2,598/FEU; and Asia-N. Europe prices (FBX11 Weekly) dipped 2% to US$1,264/FEU.