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:
• The current air freight market is slow as we enter the traditional peak season. The primary causes are:
•Recession and inflation in US and EU
•High energy costs linked to Russia/Ukraine conflict
•High inventory levels that limit new purchases
One area of constrained capacity is in Southeast Asia from Jakarta and Vietnam to China.
• In Taiwan, air freight capacity is adequate to meet weakening demand.
•Air rates and space from to USA, Europe, Southeast Asia and China are stable, with tight capacity only into San Francisco (USA).
•Passenger flights have recovered to 60% - 70% of pre-pandemic levels, with no change in fuel surcharge. However, weak market demand has led airlines to become more flexible in negotiating prices, especially for specific cargo types and dedicated flights. Air cargo tonnage has declined by 5.6% (33,863 Tons to 30,755 Tons) for Air Export and 9.2% (44,467 Tons to 41,976 Tons) for Air Import from July in Taiwan.
• In US, terminal congestion has stabilized. Air Freight rates and capacity to Asia Pac and Europe are almost to pre-Covid levels from most gateways. Airlines have begun to decrease fuel surcharges, but surcharges on trucking remain high at 50%.
•Recession and inflation in US and EU
•High energy costs linked to Russia/Ukraine conflict
•High inventory levels that limit new purchases
One area of constrained capacity is in Southeast Asia from Jakarta and Vietnam to China.
• In Taiwan, air freight capacity is adequate to meet weakening demand.
•Air rates and space from to USA, Europe, Southeast Asia and China are stable, with tight capacity only into San Francisco (USA).
•Passenger flights have recovered to 60% - 70% of pre-pandemic levels, with no change in fuel surcharge. However, weak market demand has led airlines to become more flexible in negotiating prices, especially for specific cargo types and dedicated flights. Air cargo tonnage has declined by 5.6% (33,863 Tons to 30,755 Tons) for Air Export and 9.2% (44,467 Tons to 41,976 Tons) for Air Import from July in Taiwan.
• In US, terminal congestion has stabilized. Air Freight rates and capacity to Asia Pac and Europe are almost to pre-Covid levels from most gateways. Airlines have begun to decrease fuel surcharges, but surcharges on trucking remain high at 50%.
Ocean Freight Market Overview:
· Demand for ocean freight is weakening worldwide due to economic recession and inflation issues, and the macro indicators do not suggest a quick turnaround.
·According to S&P Global Survey, the PMI in manufacturing and services fell from 50.8 in JUL to 49.3 in AUG, dropping below 50.0 for the first time since JUN 2020.
·The Shanghai Export Containerized Freight Index (SCFI) has fallen by 45% since July 1st and by 49% compared with that of the corresponding week last year.
· Overall, ocean loading factors ex Asia for long haul trades fell by 94%. The upcoming weeks would drop to 92% or so.
· Weak demand has led to sliding ocean freight prices. Intra Asia rates from Southeast and Northeast Asia are also sliding but relatively stable vs those in & out of China.
· As a result of weakening demand for outbound US lanes, Ocean Carriers are imposing blank sailings to the US West and East Coasts. From week 38 to 41, a weekly average capacity of 203,995 TEUs will be removed by the carriers, representing a weekly cancellation rate enlarged from 19% to 30% or so.
· There was no apparent cargo rush prior to PRC’s Golden Week this year (Oct 1-7), a traditional vacation period in China. During this week, the ocean carriers' average weekly capacity removal will be enlarged from 20% to 30% during weeks 38~41.
·According to S&P Global Survey, the PMI in manufacturing and services fell from 50.8 in JUL to 49.3 in AUG, dropping below 50.0 for the first time since JUN 2020.
·The Shanghai Export Containerized Freight Index (SCFI) has fallen by 45% since July 1st and by 49% compared with that of the corresponding week last year.
· Overall, ocean loading factors ex Asia for long haul trades fell by 94%. The upcoming weeks would drop to 92% or so.
· Weak demand has led to sliding ocean freight prices. Intra Asia rates from Southeast and Northeast Asia are also sliding but relatively stable vs those in & out of China.
· As a result of weakening demand for outbound US lanes, Ocean Carriers are imposing blank sailings to the US West and East Coasts. From week 38 to 41, a weekly average capacity of 203,995 TEUs will be removed by the carriers, representing a weekly cancellation rate enlarged from 19% to 30% or so.
· There was no apparent cargo rush prior to PRC’s Golden Week this year (Oct 1-7), a traditional vacation period in China. During this week, the ocean carriers' average weekly capacity removal will be enlarged from 20% to 30% during weeks 38~41.