AIR FREIGHT

Robust Transpacific air cargo market set for busier summer than usual

• The Transpacific air cargo market is set for a busier summer than usual, with spot rates remaining elevated. The eastbound corridor from Northeast Asia to the US has witnessed a rebound of over 30% in spot rates compared to the previous year.

• In the first week of May, average ocean container spot rates from Northeast Asia to the US West Coast were more than double the levels seen 12 months earlier. The average air cargo spot rate on the Transpacific trade during the same period was nearly nine times higher than ocean container spot rates.

• Furthermore, general cargo spot rates from Southern China and Hong Kong to the US were USD 5.24 per kg and USD 4.23 per kg respectively, representing an 85% increase compared to 2019. These figures indicate a strong demand for air cargo, driven by disruptions in ocean freight services and the resilience of the US economy. Shippers and freight forwarders may consider alternative routes to optimize capacity utilization and cost management in anticipation of another potentially robust peak season ahead.

Weekly air general cargo and ocean dry container spot rates from Northeast Asia to the US, ending 5May

Source: XENETA

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OCEAN FREIGHT​

Sudden container crunch sends ocean freight rates soaring, setting off global trade alarm bells

• The beginning of peak shipping season, coupled with the longer transits to avoid the Red Sea, and bad weather in Asia, have hit the flow of trade on key routes. Ocean carriers are skipping ports or decreasing their time at port, and not picking up empty containers, in an effort to keep vessels on track for delivery.

• Freight spot rates up some 30% over the past few weeks and already expected it will be heading higher. Sending cargo to Europe and US by ships will become more expensive from June as shipping lines are introducing surcharges to meet the additional cost by routing the vessels through the Cape of Good Hope.

• Xeneta ocean freight rates show the rallying spot market and the widening spread between spot and long-term rates. “The bigger the spread between long and short term rates, the greater the risk of cargo being rolled,” said Emily Stausbøll, senior shipping analyst at Xeneta.

• Due to the longer route to avid Red Sea, containers are out on the water longer and not available to be reloaded. The availability of containers has been slowed even further by the bad weather impacting port operations in China, Malaysia, and Singapore. Logistics experts tells, “Trade lanes from Asia to Latin America, Transpacific routes, and Asia to Europe are all experiencing space constraints,”

• With 2024 retail sales in the U.S. forecast at an increase between 2.5% and 3.5%, it expects the current market trend and space situation will continue through June at least.​

Short- and long-term market rates for 40-foot equivalent units from East Asia to the U.S.

Source: CNBC, thehindubusiness, theloadstar