Jan to Feb 2023 Freight Update

19 January 2023

With more than 150 stations in over 17 countries, Dimerco connects Asia with the world like no other global 3PL. Every month, we gather firsthand market information from the industry players of our global network. Here's what you should know for January to February of 2023:

Air Freight

China Government lifts COVID-19 Restrictions - On the 8th of January 2023, China government lifted its COVID-19 restrictions. This will spur several shifts in the economy and the global freight market. The lifting of restrictions means that disinfection of cargos is no longer required, which can save up to 2 hours for BUP cargos and half a day for loose carton cargos. Imported chilled/frozen foods are also no longer required to enter central disinfection and testing.
Labor Shortage in China during Chinese New Year - Most Chinese locals have not been able to celebrate Chinese New Year for the past 3 years due to the pandemic. Because of this, much of the Chinese workforce will be visiting their hometowns to celebrate Chinese New Year, leading to the closing of factories and a slowing in production all the way until Feb 5. Despite the slowing in production, capacity before Chinese New Year is expected to get tight as carriers are cancelling flights. Trucking capacity will also be tight as drivers visit their hometowns to celebrate the holidays.
Intense Winer in North America - North America is experiencing an intense winter, leading to several flight delays and cancellations. This will continue to impact the transpacific Westbound on-time performance.

Ocean Freight

Carriers to Control Market Capacity - According to Alphaliner, carriers will need to rely on (1) slow steaming, (2) Cape route diversion, and (3) deferred new ship deliveries to control market capacity. The first two measures would allow carriers to conduct more blank sailings as well as to meet IMO 2023 (effect on Jan 1st), aiming to achieve a 40% reduction in carbon emissions by 2030 compared to 2008.
Retailers to Continue to Ship to USEC - Retailers and NVOs have been routing their cargos through the US East & Gulf coasts since early 2022 due to the unsettled contract negotiations with the ILWU (International Longshore and Warehouse Union). The situation may not change until the contract is settled. However, some retailers may even choose to remain this shift afterwards.
Blank Sailing Intensifies - In order to alleviate the worsening loading factors, carriers are intensifying their blank sailings from the previous average of 20% up to 26% during weeks 4 – 8 of 2023 in order to cope with the long Lunar New Year holidays in China.