Dimerco connects Asia with the world like no other global 3PL. We integrate air and ocean freight, trade compliance and contract logistics services to make global supply chains more effective and efficient. For the latest Asia-Pac Freight Market Update, please find below overview and recommendation along with details in attached file.
Air Freight Market Overview
• IATA has expressed optimism that the air cargo market will begin to improve in the months ahead. Global trade has continued to decline in 2022, with China’s economy growing more slowly because of Covid 19-related lockdowns. Supply chain disruptions due to the Ukraine-Russia conflict are also adding to the downward pressure on trade.
• Since June 1, Shanghai has returned to normal but the expected surge in export cargo has not occurred. Domestic road transportation across Shanghai and E. China gradually recovered, together with an increase in cargo volume.
• Chongqing Airport’s (CKG) terminal overstocking situation has eased since the beginning of June. The time for shipment release for pick up has shortened from 7 days to 1-2 days.
• In Taiwan, the overall demand for freight space is weak due to raw material shortages and a reduction of orders due to inflation. Taipei-to-Shanghai Pudong Airport flights via freighters are still cancelled by Air China and China Cargo Airlines. For Taiwan-to-Europe lanes, rates have increased 15% since June 1.
• For intra-Asia flights, passenger flight frequency has gradually increased after the borders opened in Vietnam, Thailand, Malaysia, Singapore, Philippines, Indonesia, India, Korea and Japan. However, China's Zero-COVID Policy and restrictions on international flights has impacted the freight capacity of other Asian countries in and out of China.
• Fuel Surcharges continue to increase across airlines (i.e., Taiwan: +10% on Jun 1 & +5% from Jun 22nd , Southeast Asia: fluctuating weekly and expected to see +20%-30% in July)
• There is airport congestion, especially in US Los Angeles, Chicago, and New York (LAX/ORD/JFK), due to high export volumes and origin dwell times of 2-3 days in some cases.
• Since June 1, Shanghai has returned to normal but the expected surge in export cargo has not occurred. Domestic road transportation across Shanghai and E. China gradually recovered, together with an increase in cargo volume.
• Chongqing Airport’s (CKG) terminal overstocking situation has eased since the beginning of June. The time for shipment release for pick up has shortened from 7 days to 1-2 days.
• In Taiwan, the overall demand for freight space is weak due to raw material shortages and a reduction of orders due to inflation. Taipei-to-Shanghai Pudong Airport flights via freighters are still cancelled by Air China and China Cargo Airlines. For Taiwan-to-Europe lanes, rates have increased 15% since June 1.
• For intra-Asia flights, passenger flight frequency has gradually increased after the borders opened in Vietnam, Thailand, Malaysia, Singapore, Philippines, Indonesia, India, Korea and Japan. However, China's Zero-COVID Policy and restrictions on international flights has impacted the freight capacity of other Asian countries in and out of China.
• Fuel Surcharges continue to increase across airlines (i.e., Taiwan: +10% on Jun 1 & +5% from Jun 22nd , Southeast Asia: fluctuating weekly and expected to see +20%-30% in July)
• There is airport congestion, especially in US Los Angeles, Chicago, and New York (LAX/ORD/JFK), due to high export volumes and origin dwell times of 2-3 days in some cases.
Ocean Freight Market Overview:
• Blank sailings and skip calls are still unavoidable. For instance, 75 out of 760 voyages were forced to withdraw by the ocean carriers globally for their scheduled recovery measures during week no 24~28. Port congestion and inland trucking capacity remain the main challenges.
• For US imports, the downward trend on Transpacific Eastbound rates continues after Shanghai’s reopening. The Ocean Export schedule is not stable. Shippers should book early and be flexible in loading and returning containers.
• Some cargo volume is temporarily shifting from US West Coast to US East Coast for Transpacific Eastbound cargo while the ILWU and PMA are working on a contract renewal.
• After two years of investigation, the FMC (Federal Maritime Commission) concluded that the post-pandemic freight rate increases were the result of supply and demand market forces rather than market collusion.
• The market is on the mild sliding trend in the face of a two-month lockdown in Shanghai and the prolonged conflict in Ukraine. Carriers are reluctant to enact drastic pricing strategies to cope with weaker market demand – especially when global bunker costs are on the rise and when “timely” blank sailings remove redundant capacity from the marketplace.
• For US imports, the downward trend on Transpacific Eastbound rates continues after Shanghai’s reopening. The Ocean Export schedule is not stable. Shippers should book early and be flexible in loading and returning containers.
• Some cargo volume is temporarily shifting from US West Coast to US East Coast for Transpacific Eastbound cargo while the ILWU and PMA are working on a contract renewal.
• After two years of investigation, the FMC (Federal Maritime Commission) concluded that the post-pandemic freight rate increases were the result of supply and demand market forces rather than market collusion.
• The market is on the mild sliding trend in the face of a two-month lockdown in Shanghai and the prolonged conflict in Ukraine. Carriers are reluctant to enact drastic pricing strategies to cope with weaker market demand – especially when global bunker costs are on the rise and when “timely” blank sailings remove redundant capacity from the marketplace.
