Ocean freight market update
China-North America
- Rate changes: In late May, ocean freight rates on the China to US West Coast and East Coast lanes saw notable increases. While weekly rates saw an uptick of less than 5%, comparing month-by-month, rates to the West Coast rose by approximately 70% from their April lows, while East Coast rates climbed by nearly 50% during the same period. These increases reflect the early onset of peak season and concerns over potential disruptions later in the year.
- Market changes: Carriers have adjusted schedules due to Red Sea diversions, leading to congestion and a decrease in available equipment at export hubs. This has resulted in more rolled containers and delays. Additionally, the new Federal Maritime Commission (FMC) rules on detention and demurrage charges, which came into effect on May 28, aim to improve billing practices and dispute resolutions, potentially impacting shipping practices and costs. Despite these challenges, demand has stabilized, with volumes expected to remain manageable through the summer months. If these trends continue, further rate hikes may occur in June.
China-Europe
- Rate changes: Rates on the China to North Europe and Mediterranean lanes increased by around 6% and 3%, respectively. This is primarily due to a slight uptick in European demand and the announcement of additional blank sailings by carriers. Rates are likely to remain stable, with potential increases depending on future demand and capacity adjustments.
- Market changes: Despite the rate increases, the market remains cautious due to an oversupply of newly built ultra-large container vessels. The deployment of these vessels continues to pressure the market, causing rates to stabilize rather than surge. Market analysts predict that unless demand significantly improves, the upward momentum in rates might not sustain for long.
Air freight/Express market update
China-US and Europe
- Rate changes: Air freight rates from China to North America saw a slight decrease of about 3%, while rates to North Europe remained stable. The overall global airfreight index indicates a marginal decline, reflecting the mixed demand situation across different lanes.
- Market changes: The air cargo market continues to face overcapacity, with several carriers grounding freighters.This has added pressure on rates, especially for e-commerce and general cargo. Notably, demand from Asia Pacific origins has been strong, with rates from key markets like Vietnam to Europe almost doubling year-on-year. Despite this, the overall market outlook remains cautious, with carriers focusing on improving operational efficiency amid rising costs and geopolitical tensions.
Disclaimer: All information and views in this post are provided for reference purposes only and do not constitute any investment or purchase advice. The information quoted in this report is from public market documents and may be subject to change. Chovm.com makes no warranties or guarantees for the accuracy or integrity of the information above.
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