AIR FREIGHT

General Air Cargo In Decline As China-us E-commerce Boom Slows

• Airlines prioritized surging e-commerce shipments on trans-Pacific and Asia-Europe routes over the past few years at the expense of general air freight. But as US tariffs curb low-value imports from China, carriers are finding traditional markets have also declined.

• In 2024, air cargo experienced a record 12% growth in global volume, primarily driven by e-commerce demand. However, the elimination of the U.S. duty-free exemption on May 2nd has resulted in decreased air cargo demand on the trans-Pacific route. As a result, airlines that heavily focused on e-commerce are now seeking opportunities in traditional forwarder-driven markets, which have weakened due to various economic and geopolitical factors.

• Since May 2nd, there has been a drop in air cargo demand on the trans-Pacific. The data shows freighter capacity deployed on the eastbound trans-Pacific from May 12–18 fell 8% yoy to 82,000 tons while increasing 19% yoy to 74,000 tons on Asia-Europe.

• The air cargo rates from Hong Kong to the US surged 50% ahead of the May 2nd deadline, according to Xeneta. Since then, rates have declined.

Asia Pacific to North America air freight capacity with weekly percentage change

Image source: spglobal

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

June Expected To Be Peak For Niche Carriers In The Trans-pacific: Analyst

• Niche carriers, smaller operators with limited deep-sea capabilities, represented 7%-10% of the total weekly capacity on the Asia-North America West Coast (NAWC) in 2019. During the pandemic, new entrants capitalized on high freight rates and strong consumer demand, increasing niche carriers' share to 10%-15% by mid-2021. However, as market conditions stabilized, these new entrants phased out their services by June 2023. By January 2024, niche carriers increased their capacity share to 13%, indicating a return of opportunistic carriers to the market due to favorable conditions.

• According to Sea-Intelligence, recent months have seen niche ocean carriers deploying 4.6% of the weekly capacity in trans-Pacific by the end of June in which the capacity “is back at the level” seen during the height of the pandemic. The draw for the niche carriers is the strength in spot freight rates, Sea-Intelligence said, although those rates have already started to soften amid the broader injection of fresh capacity.

• Sea-Intelligence believe current conditions mirror those of the pandemic. If history repeats, they may quickly withdraw capacity once the market normalizes. The data sees the current surge in niche carrier capacity is ending fast, the weekly niche carriers will account for 3.8% of capacity by the end of July, with that amount dropping to 2.6% by mid-August

Niche Carrier Cap Share of Weekly Asia-NAWC Cap (3wk avg.)

Source: JOC, SeaIntelligence718

Vessels Now Keeping to Omani Waters in Strait of Hormuz Traffic Scheme

• Shipping traffic through the Strait of Hormuz is currently adhering more strictly to established sea lanes within Omani waters, avoiding Iranian territorial waters in response to heightened regional tensions and recent U.S. military actions against Iran. Vessels entering and leaving the Arabian Gulf are navigating closer to the Omani coast in the Gulf of Oman approaches and maintaining routes wholly within Omani waters at the strait’s narrowest point, a shift from previous patterns that often included Iranian waters. This adjustment aims to reduce risk amid concerns over potential conflict escalation, while the strait remains open and commercially active with routine traffic levels. However, concentrating ships into narrower lanes near Oman and the Emirati coast increases collision risks. Maritime authorities continue to advise caution, especially given Iran’s military reach and ongoing geopolitical instability in the region

• Concurrently, the escalating Israel-Iran conflict has triggered a sharp rise in shipping insurance costs in the Middle East. Insurance premiums for vessels transiting the Persian Gulf have increased from 0.125% to 0.2% of a ship’s value, with war risk rates also climbing for the Red Sea and Israeli ports seeing a more than threefold surge. The validity period for insurance quotes has been shortened due to market volatility, and some shipowners are rerouting to avoid the Strait of Hormuz, causing a modest decline in voyages through the region.

Ships in the Straits of Hormuz identified by vesselfinder.com

Source: MaritimeExecutive, MaritimeExecutive-2, CNBC

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

Tariffs Continue to Disrupt Freight Flows and Shift Modal Growth and Strategy

• In April, heightened trade tensions, intermodal volume declines, and a sharp contraction in ocean and air freight demand shaped the overall landscape. Meanwhile, warehousing demand is rebounding as firms adapt their supply assurance strategies in response to global uncertainties and potential cost increases.

• Airfreight industry revenue is forecasted to contract by $22B over three years, as e-commerce shipments account for 50-60% of China-US shipments. As China-to-US container bookings drop and e-commerce air shipments take a hit, it seems that the industry is shifting from speed-focused models to ones centered on cost efficiency and resilience. Warehousing demand appears to have some early-stage indications of rebounding, driven primarily by stockpiling strategies and realignment of supply chains.

• Urban Outfitters, a lifestyle apparel retailer, is taking on tariffs by shifting its primary mode of cargo transportation from air freight to ocean freight, cutting a major cost in its inbound logistics network. The air-to-sea conversion would protect margins but add about 30 days to delivery times. To account for the 30 extra days at sea, the lifestyle apparel retailer is planning to bring in fall product earlier in the second quarter.

Source: MSN, Comments from PWC Principal Partner

Image source: Maritime Gateway

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

How high will ocean freight rates go after US and China lower tariffs for 90 days? Shippers don’t need to sacrifice financial efficiency for supply chain resilience

• Shippers are clearly ready to pay higher prices to ensure their goods arrive in the US within the 90-day window. After the ‘Liberation Day’ announcement, many opted for air freight to avoid tariffs, finding the higher cost acceptable compared to delays.

• On the China to US West Coast route, rates rose 8% since May 14, from USD 2,600 to USD 2,805 per FEU. Rates are expected to climb higher due to urgency from the US-China tariff announcement, as shippers prioritize moving cargo and renegotiate with carriers.

• Once shippers have built up inventories, they will not continue to frontload imports. Demand will therefore ease, and carriers will once again be struggling to fill their ships.

• This means the traditional Q3 peak season will arrive earlier in 2025, but it should not take too long for spot rates to soften and continue the downward trend seen during Q1. Carriers may start removing capacity in response – just as they did while the 145% tariffs were in place – but it will probably not be enough to stop rates falling to levels not seen since Q4 2023.

Far East to US West Coast market average and mid-high spot rates

Source: Xeneta

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

Air cargo shippers opt for short-term contracts as tariffs escalate

• Shippers and freight forwarders are hesitant to make long-term commitments on air cargo capacity as international trade tensions rise, according to an April 3 report from Xeneta. In Q1, 79% of shipper contracts were short-term agreements of three months or less, a nearly 20 percentage point increase year-over-year. Niall van de Wouw, Xeneta’s chief airfreight officer, noted that slowing rate growth typically encourages longer commitments, but the current climate has led to uncertainty.

• The U.S. is set to eliminate tariff-free access for low-value shipments from China and Hong Kong, potentially costing the air cargo sector over $22 billion in revenue over three years. Derek Lossing of Cirrus Global Advisors warns that these tariff increases could severely impact demand on e-commerce platforms like Temu and Shein. E-commerce shipments account for about 50-60% of air volumes between China and the U.S. Lossing predicts that total air cargo revenue on this trade lane could drop by over 30% due to the new trade policies.

• Cathay Pacific Airways anticipates a reduction in air cargo demand between mainland China and the U.S. due to new tariff regulations. The airline plans to shift freighters to alternative routes to adapt to this changing landscape.

Source: SupplyChainDive, Reuters, Freightwaves

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

Chinese freight ship traffic to busiest U.S. ports, Los Angeles, Long Beach, sees steep drop

• There is a significant decline in Chinese freight vessel traffic to the U.S. ports of Los Angeles and Long Beach, the busiest for Asian freight, due to President Trump's tariffs and recession fears.

• According to Port Optimizer - a tracking system for ships, vessel arrivals for the week ending May 3 dropped 29% week-over-week and 44% year-over-year, with only 12 vessels scheduled in this week compared to 22 the week of April 20. A total of 62,568 TEUs are expected to arrive the week of May 4 to May 10, down from 120,608 TEUs the week of April 20 to April 26.

• CNBC recently reported a total of 80 blank, or canceled, sailings out of China driven by reduced demand, trade war tensions and adjustments in transpacific routes. The FreightWaves also highlights the severe impact on Los Angeles truckload volumes, with a 31% drop in accepted tenders year-over-year and a projected decline to just 45,000 weekly import containers by mid-May, the lowest since early 2020. This has caused a ripple effect, with over 700,000 trucking loads vanishing nationwide, signaling broader supply chain challenges.

• Treasury Secretary Scott Bessent suggested a possible de-escalation of the trade war, but the situation remains critical for West Coast logistics

Import and export volumes processed at U.S. ports

Total monthly TEUs (Jan. 2022–March 2025)

Source: CNBC, freightwaves

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

Slump in Shanghai spot rates may be taste of what's to come for air cargo e-commerce volumes

• The ongoing tensions between major trading nations seem to have impacted international e-commerce volumes, as February's global air cargo market data shows a -29% month-on-month drop in spot rates from Shanghai to the US, at USD 3.23 per kg, according to Xeneta.

• Despite the Lunar New Year and typical seasonal slowdowns, this decline follows the US's removal of the de minimis exemption on Chinese shipments, suggesting that regulatory factors may be influencing the air cargo market.

• Global air cargo capacity in February remained flat compared to last year, with a combined increase of just +1% in January and February. In February, the global air cargo spot rate rose by +10% year-on-year to USD 2.53 per kg, the slowest growth since June 2024.

• Global air cargo demand, supply, load factor and freight rate developments

Air cargo demand slows to low single-digit amid growing trade uncertainties

Source: Xeneta

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

The Geopolitical Shift in Maritime Trade

• Reshuffling Of Traded Volumes After Red Sea Attack

• The ongoing situation in the Red Sea has forced many carriers to reroute vessels around the Cape of Good Hope rather than using the shorter Suez Canal route. According to industry reports, this detour adds approximately 7-10 days to transit times and significantly impacts vessel capacity (Freightos Transit Time Calculator). If the situation stabilizes and shipping returns to normal Suez Canal routing, we could see a sudden increase in effective capacity, potentially driving rates lower. However, continued disruption would maintain pressure on rates and transit times.

Source: Natwest, Gocubic

Chinese firms are stakeholders in more than a quarter of Africa's ports

Chinese firms are active stakeholders in an estimated 78 of 231 African commercial ports. This is a significantly greater presence than anywhere else in the world. Access to African ports gives China the opportunity to establish strategic maritime and military operations on the continent. This push for development is driven by commercial demand, as Africa has the lowest share of shipping trade and vast untapped resources, making it a prime market for investment.

Transshipment along the West African coast is seeing a strategic increase in volume as Europe-Asia sailings avoid Red Sea risks by routing around the Cape of Good Hope.

Since June 2022, the average vessel size to West Africa has increased by 50%. Shipping lines are deploying larger vessels, with the largest exceeding 16,000 TEU. Since January 2024, 26 vessels of 15,000 TEU and above have been deployed for trades to West Africa, with 22 operated by MSC on standalone services across four routes

Ports in Africa developed or affiliated with China

Source: Sea Intelligence, Yahoo, Frieghtnews

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

A Slower Than Expected Start To 2025 As Air Cargo Faces A ‘Waiting Game’ Amidst Fears Of Tariff Trade War

• In January 2025, global air cargo demand grew by just 2% yoy, a significant drop from the double-digit increases seen in 2024. This decline was attributed to the earlier LNY affecting volumes from China.

• According to Xeneta’s analysis, despite concerns over new U.S. tariffs, January's lower demand also followed an unusually high January 2024. The air cargo market is facing uncertainty, particularly regarding trade negotiations, which complicates planning for shippers.

• E-commerce remains a vital driver of air cargo growth, with cross-border shipments from China to the U.S. accounting for 25% of total global sales. However, the potential suspension of the de minimis exemption could disrupt air freight capacity, leading to increased costs and delays. Last year, e-commerce volumes from China grew by 20-30%.

• In terms of market performance, global air cargo chargeable weight grew 2% in January, with capacity also increasing by 2%, while the spot rates remained 17% higher than the previous year, driven by e-commerce demand and limited air cargo capacity.

Global air cargo demand, supply, load factor and freight rate developments

Source: PayloadAsia

_________________________________________

OCEAN FREIGHT​

Post-Red Sea: Major demand drop in Asia-Europe

• The Red Sea crisis has resulted in Asia-Europe supply chain transit times increasing by 7-14 days, which has effectively led shippers to raise their inventories by a corresponding amount. In 2024, demand on Asia-Europe routes grew by 8.5%; however, when accounting for the extended transit times, the actual growth adjusts to a range of 4.5%-6.5%. This reduction means that the Asia-Europe trade experienced a demand growth boost purely due to the longer transit times. Averaging the supply chain lengthening to 10 days yields a demand growth boost of approximately 2.9 percentage points.

• If vessels revert to the Suez routing, the supply chain will contract leading to a release of excess inventory. This is expected to temporarily impact importers to curb orders to mitigate the surplus. Consequently, after the Suez Canal reopens, a negative impact of -2.9 percentage points on Asia-Europe demand growth is anticipated.

• However, ocean carriers are cautious about returning to the Red Sea, requiring a permanent ceasefire between Israel and Hamas before resuming services. Meanwhile, the insurance costs for transits have skyrocketed from about 0.05% of a ship's value to approximately 1%, significantly increasing the cost for carriers.

• The ongoing geopolitical instability has led to a wait-and-see approach from shipping companies, affecting their willingness to navigate the region. Meanwhile, European naval operations will continue to monitor shipping safety in the Red Sea and surrounding areas, extending their presence until Feb. 28 2026.

Asia to North Europe short- and long-term rates converging

(short-term contracts of 32 days or less, long-term contracts of 88 days or more, and long-term contracts signed in the last three months)

Uncertainty over the resumption of Red Sea transits is prompting Asia-North Europe carriers to offer discounts of up to 22%. Despite concerns, carriers believe they can manage overcapacity through increased scrapping and slower vessel speeds.

Source: SeaIntelligence, JOC, JOC-2, ShippingWatch

Xeneta: Global Congestion is building

• In February, the spot market saw significant weakening across global trades, with rates on major routes despite carriers' efforts to maintain rates amid tender negotiations. Year-on-year comparisons show a decrease from previously high rates, but current levels are still double those compared to December 2023.

• Meanwhile, congestion is rising globally, with over 10 million TEU currently tied up in ports, marking a significant milestone. This congestion represents 32% of the fleet, the highest level since December 2023. Contributing factors include storms, strikes, and record imports, particularly affecting North Europe. The capacity of ships inbound has increased by 16.8% compared to December 2024, reaching a seven-day moving average of 1.1 million TEU, the highest since October 2022.

• In China, congestion reached its highest level since March 2020 in January, with 2.7 million TEU tied up, although this has since decreased to 2.2 million TEU by mid-February. The U.S. East Coast is also experiencing high congestion levels, reaching its peak since November 2022, even without strikes in January.

• Despite tight capacity and an unchanged idle fleet, rates continue to fall as the market adjusts. Xeneta's outlook predicts long-term rates from the Far East to Europe, the U.S., and South America could drop by 7% to 30% by June 2025. Carriers are offering substantial discounts for longer contracts, reflecting expected market declines. Some shippers are exploring indexing for tendering to adapt to market volatility.

Global congestion in container shipping

(Million TEU (LH-axis), % share (RH-axis)

Source: Xeneta

AIR FREIGHT

Air cargo demand seen growing 4-6% in 2025

• The global air cargo market is expected to grow by 4% to 6% in 2025 amid cautious optimism “tempered by its susceptibility to geopolitical tensions, a subdued manufacturing outlook, and political interventions in an increasingly volatile world. The growth will continue to outpace global cargo capacity supply growth of 3% to 4%. according to the spokesperson of Xeneta.

• The report said a rebound of the traditional air freight market will be supported by demand for semiconductors related to generative artificial intelligence and advanced computer processing.

• Looking further ahead, increasing environmental regulations could impact future growth of global air cargo capacity. For instance, International Civil Aviation Organization aircraft emissions standards on all in-production aircraft are set to take effect in 2028 and will bring an end to the production of Boeing’s current 777 freighter and 767 freighter.

• In November 2024, international air traffic rose by 9.5%, fueled by increased e-commerce demand in the US and Asia Pacific, and continued restriction in ocean shipping. Most airline regions saw growth, with changes ranging from a 13.4% increase to a minor 0.7% decrease (chart)

International CTK by airline region of registration, YOY, %

Source: IATA, Portcall

_________________________________________

OCEAN FREIGHT​

Connectivity increases benefit major ports

• Newly released Port Liner Shipping Connectivity Index released by UNCTAD shows The top-10 most-connected ports in Q4 2024 have seen their average connectivity increase consistently across the analyzed period, which accelerated since 2020, increasing the gap to the next 10 ports considerably. The remaining top segments have all seen increases, but they are relatively marginal compared to the top-10 most-connected ports.

• “What this shows is that the most-connected ports are getting increasingly more connected on average. This trend shown here points to a network setup, which is increasingly reliant on a smaller set of major hub ports, where smaller ports are increasingly relegated to feeder services, reducing their overall liner connectivity score.”

• According to a recent report, Shanghai is named among the busiest ports in the world in 2025. The annual container throughput of Shanghai Port reached 51.5 million TEUs last year, ranking first in the world for the 15th consecutive year and rising as the world's first port to stand above the 50-million-TEUs level.

Average Global Connectivity

(LeftL Top-100 tiered Right: Bottom-100 tiered)

Source: Container News, Gocomet, China Daily

AIR FREIGHT

Growth in air cargo demand to decelerate in 2025, IATA says

• Air cargo volumes are predicted by IATA to rise by 5.8% year on year to reach 72.5 million tons in 2025, supported by e-commerce and demand related to the Red Sea. While demand is expected to grow, average yields are predicted to decline slightly by 0.7%, remaining well above pre-pandemic levels. This slight decrease in yield is expected to be stable in 2025. Cargo revenues are projected to reach $157 billion, accounting for 15.6% of total airline revenues.

• Continued geopolitical uncertainty, particularly regarding sea shipments routed through the Suez Canal, along with booming e-commerce from Asia, are favorable trends for air cargo in 2025. However, the increased competitiveness of air freight may diminish once major shipping routes stabilize or if significant new vessel capacity is introduced.

• Despite lower fuel prices, staffing costs have risen, and unresolved supply chain issues pose a capacity challenge. Political risks, particularly changes to tariffs and trade under the incoming Trump administration, are also concerns.

• IATA reported robust performance for air cargo in 2024, with demand expected to increase by 11.8% year on year, following two years of declining volumes after the pandemic peak. The strongest growth has been observed among airlines in the Middle East and Asia Pacific, benefiting from robust e-commerce and disruptions in ocean shipping. Overall, while capacity is expected to continue growing, it will do so at a gradually decelerating rate, warranting cautious optimism for the air cargo sector in 2025.

Source: freightwave, aircargonews

________________________________________

OCEAN FREIGHT​

Asia-US container spot rates spiking to year-end highs

• Container spot rates from Asia to the United States are experiencing significant increases, reaching levels not seen since December 2020, primarily due to surging imports ahead of a potential strike by the International Longshoremen’s Association and an early Lunar New Year on January 29.

• The spot rate for West Coast shipments has risen dramatically from $2,500 per FEU to the mid-$4,000s, following the GRIs of nearly $2,000 per FEU. Meanwhile, East Coast rates have jumped from approximately $4,367 to the mid-$5,000s to low $6,000s, reflecting GRIs of about $1,500 to $1,600.

• Historically, December is a slow month for trans-Pacific trade, but this year’s conditions have prompted retailers to front-load merchandise due to concerns over a potential strike, coupled with the imminent Lunar New Year and looming tariffs on imports from key trading partners. Vessel space is tight, with some carriers overbooked, leading to the formation of container roll pools at Asian ports for shipments unable to embark on their scheduled voyages.

• Despite the challenges, demand for shipping to the East Coast remains surprisingly high. Retailers are weighing the costs of shipping directly to the East Coast against potential delays and increased land transportation expenses. This situation has also led some importers to divert shipments to the West Coast, exacerbating rail congestion in California.

Platts container rate North Asia to US Coasts USD per FEU

Source: JOC, seatrade-maritime

AIR FREIGHT

Cathay cargo carried up 14% in Oct on Expert, Priority demand

• Cathay Pacific's October 2024 cargo performance showed strong growth, with tonnage rising 14.3% to 142,323 tonnes and revenue tonne kilometres increasing 9.8%. The cargo load factor reached 61.5%, up 0.8 percentage points. For the first 10 months of 2024, tonnage growth outpaced revenue and available tonne kilometres, indicating improving market conditions.

• “For cargo, the robust demand we have been seeing is expected to continue throughout the rest of the peak season, driven by e-commerce, high-tech and electronic goods from the Chinese Mainland, Southeast Asia, as well as perishables from South West Pacific and the Americas,” said Cathay Pacific’s spokesperson.

• Aggressive growth is likely to continue for e-commerce cargo volumes, according to a survey. Demand growth in 2025 will likely be limited by available capacity. Policy and security are perceived as key risks to growth with increasing imbalances leading to operational issues. If e-commerce growth continues at +20 percent and general cargo grows at +two percent, 2025 air cargo growth would be +seven percent, the survey report added.

Source: Cathay Pacific, Stattimes-1, Stattimes-2_________________________________________

OCEAN FREIGHT​

US-only supply chains will emerge under Trump: PIIE economist

• With Trump's presidency plans for tariffs prompted shippers to revise trade strategies, companies like Steve Madden, Yeti, and Traeger adjusted their China sourcing to lower costs.

• The Trump administration is focused on increasing reshoring to the U.S, meaning a decrease in the flow of goods in and out of the US. Both international and domestic freight rates are expected to spike given an increase in volume, per a consultant. S&P Global Market Intelligence said Trump’s economic and international policies could bring another round of restructuring to global supply chains. This shift in supply chain dynamics could lead to changes in trade deficit figures between the U.S. and various countries involved in reshoring efforts.

• The U.S. trade deficit with mainland China stood at $287 billion in the 12-month period through Sept. 30, 2024, down by 18.7% since 2021 but is still the largest individual deficit with any country. There has been a rise in Chinese manufacturing moving to Mexico under terms of the Trump-negotiated USMCA trade deal, which Trump is expected to take a new look at in his second term. More companies have also set up shop in countries such as South Korea, Vietnam and Malaysia, which could also face tariff actions. Through September, Vietnam’s trade deficit with the U.S. was up 30.6% in the previous 12 months compared with the 2021 level.

Ocean container rates surged over 70% in 2018 following Trump's tariffs on Chinese imports, significantly altering the global shipping landscape.

Source: Supply Chain Dive, Supply Chain Brain, CNBC-1, CNBC-2, MSN, Industry Week

AIR FREIGHT

Europe and Americas record air cargo sales declines in 2024, while Asia, Middle East and Africa see strong growth

• In the first nine months of this year, all six major air cargo regions experienced year-on-year (YoY) growth in outbound chargeable weight, but Europe and North America saw declines in overall air cargo sales.

• North America reported a 12% drop in sales despite a 4% increase in chargeable weight, due to a 15% decrease in average rates. Europe faced an even sharper 16% decline in sales, despite an 8% increase in weight, driven by a 22% drop in rates. Conversely, regions like the Middle East & South Asia (+62%), Asia Pacific (+23%), and Africa (+9%) enjoyed significant sales growth, attributed to rising tonnages and rates.

• In September, general cargo air tonnages grew by 13% yoy from January to September, outpacing special cargo's 10% growth, driven mainly by a surge in cross-border e-commerce. Special cargo made up 35% of the total market, with Asia Pacific contributing 71% of global YoY growth in this category.

Source: WorldACD​_________________________________________

OCEAN FREIGHT​

US export market navigating ‘disruptive’ peak season amid ag shipment growth

• The U.S. export market is encountering operational challenges during the peak season for agricultural commodities, with delays at ports and inland hubs complicating equipment availability and berthing schedules. Shippers are reporting increased slowdowns at key inland gateways like Minneapolis and Omaha, attributed to seasonality, labor disruptions, and carrier practices such as blank and slower sailings.

• Despite these issues, agricultural export volumes have recently grown, with a 12.5% yoy increase in containerized agricultural exports reported for August. However, trans-Pacific westbound shipping reliability dipped slightly from 64.8% in August to 63.6% in September, the first decline since April. Exporters are particularly concerned about congestion at the ports of Los Angeles and Long Beach, where rail service issues and unstable sailing schedules are exacerbating delays.

• Additionally, average dwell times for rail-bound containers at these West Coast ports reached 9.25 days in September, the highest since October 2022. Meanwhile, export rates from the East Coast to North Asia have softened, down 11% as of the week 24th Oct compared with the previous week. West Coast rates remained. stable

• Although shipping schedules disrupted by a recent strike at East and Gulf Coast ports are expected to normalize, this recovery hinges on East Coast exports rebounding to pre-strike levels while West Coast ports work through existing backlogs.

The spot rate trend for USEC/USWC to North Asia

Source: JOC

AIR FREIGHT

Air freight peak season surge amid tightening capacity

• As the air freight market enters the peak season, both sources indicate a significant surge in demand coupled with tightening capacity and rising prices. According to Metro, spot rates from Asia-Pacific to Europe have seen considerable week-on-week increases, with rates from Thailand to Europe nearly doubling compared to the previous year. Similarly, The Loadstar notes that rates from Asia to North America have increased by 64% year-on-year.

• The air charter market is also bracing for a very busy fourth quarter, with charter brokers warning of tight availability for widebody aircraft due to high demand. This surge is largely driven by the booming eCommerce sector, which is consuming a substantial amount of air cargo capacity. Major production centers in Asia, including China, Korea, and Taiwan, are experiencing congestion due to high shipping volumes. Capacity shortages are expected to escalate, particularly for shipments from India and China to the U.S. and Europe, leading to significant cost implications as demand continues to outstrip supply.

• In response to these challenges, carriers are expanding their networks, adding more flights, and introducing additional transpacific services to better meet anticipated demand. Despite the pressures, there is cautious optimism in the industry as stakeholders work to manage the balance between capacity and demand during this critical period, particularly in the air charter market where brokers emphasize that capacity is available "for a price."

Source: Metro, TheLoadStar

​_________________________________________

OCEAN FREIGHT​

Asia-US East Coast spot rates plummet amid strike threat cargo diversions

• Spot container rates from Asia to the US East Coast have dropped over 40% in the past three weeks, now at $5,000 per FEU, down from $8,500 on September 4. This decline is attributed to cargo diversions in anticipation of a potential longshore strike and a waning peak season.

• Many East Coast shippers imported holiday merchandise early to avoid disruptions, while West Coast ports experienced a surge in imports, rising about 25-30% year over year in August. In contrast, East Coast imports saw a modest increase of only 3%.

• While containerized imports at East Coast ports fell to 1.07 million TEUs in August—a 4% decline from July—they were still up 9.1% from August 2023. Ports are preparing for possible strikes with extended operating hours and disruption surcharges.

• Carriers plan to significantly reduce capacity, with around 13% of total capacity to the US East and Gulf coasts being blanked in October, marking the largest monthly blanking since February. Overall expected capacity will rise from 791,503 TEUs in September to 829,987 TEUs in October.

Total monthly TEU volume o FUSEC containerized imports, with yoy change

Source: JOC