Global Freight Market Update: Navigating Challenges and Opportunities in Logistics

Introduction: The Current State of Global Freight

As we move through the third quarter of 2022, the global freight market continues to experience significant fluctuations and challenges. From softening demand in some regions to persistent congestion in others, logistics professionals are navigating a complex landscape. In this comprehensive update, we'll explore the latest trends in ocean and air freight, trucking, and customs compliance, providing valuable insights to help you make informed decisions for your supply chain strategy.

Key highlights from recent market data include:

• Falling spot rates and increased blank sailings in the transpacific eastbound (TPEB) trade lane
• Continued congestion at major European ports, particularly Hamburg and Rotterdam
• Softening air freight demand across multiple regions
• Persistent chassis shortages and congestion at US ports and inland locations
• New developments in customs regulations and trade compliance

As we delve into these trends, we'll also explore how FreightAmigo's digital logistics platform can help you navigate these challenges and optimize your shipping operations.

Ocean Freight Market Update

Asia to North America (TPEB)

The transpacific eastbound trade lane is experiencing a notable shift in market dynamics. Spot rates continue to fall, accompanied by an increase in blank sailings as carriers adjust to lower demand. Schedule reliability among alliances remains low, creating challenges for shippers trying to maintain consistent supply chains.

Key points:

• Spot rates are softening in major markets
• Space and equipment are generally open, with a few exceptions
• On-street container dwell times are elevated, and inventory at terminals is reaching capacity in some inland locations
• Container ground stacking is occurring at rail yards due to insufficient chassis supply and rail traffic imbalances

FreightAmigo's Recommendation: Book at least 2 weeks prior to your cargo ready date (CRD). For immediate shipments, consider taking advantage of available space and softer floating market rates.

Asia to Europe (FEWB)

The expected peak season has not materialized, and demand continues to slow. However, supply remains relatively tight due to blank sailings, vessel sliding, and port omissions. Port congestion in Europe, particularly in Hamburg and Rotterdam, has reached critical levels, causing further delays and late vessel returns to Asia.

Key points:

• Continued downward pressure on spot rates due to lower demand
• Space availability impacted by blank sailings and European port congestion
• Potential power cuts in Ningbo (Zhejiang province) may affect production output

FreightAmigo's Recommendation: Allow flexibility when planning your shipments due to anticipated congestion and delays. Our digital platform can help you compare rates and find available capacity across multiple carriers.

Europe to North America (TAWB)

August demand is expected to be lower due to European factory closures, particularly in the Mediterranean area. However, a strong rebound in demand is anticipated beginning in September. While congestion on the U.S. West Coast has improved slightly, some U.S. East Coast ports are now experiencing worsening conditions.

Key points:

• Rates remain stable at high levels, with no signs of steep declines in the near future
• Space is still very tight on the U.S. East Coast, with some availability for direct routing to the U.S. West Coast
• Equipment availability remains a significant challenge, especially in the Mediterranean region

FreightAmigo's Recommendation: Book 4 or more weeks prior to CRD. Consider premium services for higher reliability and no-roll guarantees. Our platform can help you identify and secure these premium options efficiently.

Indian Subcontinent to North America

The market remains fluid, with demand staying strong as we enter the second half of August. Rates are largely unchanged across key port pairings but remain elevated compared to pre-COVID levels.

Key points:

• Space is available across most lanes at standard (non-premium) rate levels
• Some service level issues are arising due to U.S. East Coast port congestion and disruptions in the EU
• Rising equipment deficits are being reported across India, particularly in smaller ports and inland container depots (ICD)

FreightAmigo's Recommendation: Take advantage of declining rates. Be aware that carriers may implement blank sailings to avoid underutilization, which could lead to increased rates in the future. Our digital platform can help you track these market fluctuations and secure optimal rates.

Air Freight Market Update

Asia

The air freight market in Asia is experiencing varying conditions across different regions:

• North China: Sufficient capacity for both TPEB and FEWB lanes, with weak overall demand leading to rate decreases
• South China: Soft market demand for both TPEB and FEWB lanes, with slight rate decreases
• Taiwan: Soft market continues with rates similar to last week; flights operating normally despite political tensions
• Korea: Very slack demand with no signs of improvement
• Southeast Asia: Soft demand continues with rates maintaining similar levels; some carriers canceling flights from Vietnam due to low demand

FreightAmigo's Recommendation: Take advantage of the current soft market conditions to secure favorable rates. Our digital platform can help you compare options across multiple carriers and routes to find the best value for your shipments.

Europe

Demand continues to trend at lower levels and is expected to pick up slowly from mid-September. Transatlantic belly capacity ex-European hubs remains strong, helping maintain lower rate levels despite high fuel prices.

Key points:

• Ground handling operations in major European hubs have improved compared to July
• The situation in Frankfurt remains volatile, with contingency plans in place to avoid significant delays
• Delays are expected at UK border crossings due to driver shortages

FreightAmigo's Recommendation: Build pallets below 160cm to increase possibilities of better uplift options and rates on passenger aircraft capacity. For all trade lanes, continue to place bookings early to secure the best uplift options and routings. Our platform can help you optimize your pallet configurations and booking timelines.

Americas

Export demand remains steady from all markets, with US airports running at a normal pace. Capacity is opening up further, especially into Europe, where most carriers have increased the number of passenger flights for their summer schedules.

Key points:

• Rates remain stable week over week
• Shipments into Europe could experience additional destination dwell time due to labor shortages in some western European hubs
• Heavy travel season in and out of Canada is straining major airport infrastructure, resulting in longer than normal dwell times for both import and export cargo

FreightAmigo's Recommendation: Consider diversifying your routing options to mitigate potential delays in certain hubs. Our digital platform can help you identify alternative routes and compare transit times across different carriers.

Trucking & Intermodal Update

US Import/Export Trucking

Congestion continues to be a significant issue at various ports and inland locations:

• Montreal and Toronto terminals and inland ramps are experiencing persistent congestion
• Chassis shortages continue, notably in Chicago, NY/NJ, Memphis, and LA
• East coast and gulf congestion is expected to continue through August, with vessels at anchor in New York, Norfolk, and Savannah
• LA/LB and Oakland have seen deteriorating conditions, partly due to AB5 strike action

Highway diesel fuel prices are dropping but remain well above the start of the year across all regions.

US Domestic Trucking

The domestic full truckload (FTL) market is facing several challenges:

• High inventory/sales ratios
• Global inflation
• Record high diesel fuel prices
• Sharp drop in container imports

Key market trends:

• Tender rejections by carriers have decreased by 67% year-over-year
• Spot rates have bottomed out to a 16-month low, down ~35% year-to-date
• Load-to-Truck ratios are down ~30% year-over-year
• Tender volumes from customers are down 20% year-over-year

FreightAmigo's Recommendation: Take advantage of the current market conditions to secure favorable rates for your trucking needs. Our digital platform can help you compare rates across multiple carriers and find the best value for your shipments.

Customs and Compliance News

CTPAT Trade Compliance Opens to New Members, Imposes New Rules

As of August 1, U.S. Customs and Border Protection (CBP) has reopened the application process for new members to the Customs-Trade Partnership Against Terrorism (CTPAT) Trade Compliance program. New applicants are required to satisfy recently released minimum security criteria, including expanded compliance obligations around forced labor.

USITC Announces Investigation into USMCA Auto Rules of Origin

The U.S. International Trade Commission (USITC) has announced a new fact-finding investigation on the USMCA automotive rules of origin. The investigation will review the impact of these rules on the U.S. economy, automotive production, and trade competitiveness.

CBP Announces New Public-Private Partnerships

CBP has announced tentative selections for new partnerships that will allow approved private sector and state and local government entities to reimburse CBP for expanded services. These partnerships aim to increase CBP's ability to provide new or enhanced services and expand its capacity to process increased cargo volumes.

FreightAmigo's Recommendation: Stay informed about these regulatory changes and consider how they may impact your supply chain. Our digital platform includes features to help you manage customs documentation and ensure compliance with evolving regulations.

Conclusion: Navigating the Complexities with FreightAmigo

As we've seen, the global freight market continues to present both challenges and opportunities for shippers. From softening demand in some regions to persistent congestion in others, staying informed and adaptable is key to success in this dynamic environment.

FreightAmigo's digital logistics platform is designed to help you navigate these complexities with ease. Our comprehensive solutions offer:

• Real-time rate comparisons across multiple carriers and modes
• Efficient booking processes for international courier, airfreight, sea freight, rail freight, and trucking solutions
• 24/7 shipment tracking capabilities
• Streamlined customs clearance, cargo insurance, and trade finance services
• Automated shipment documentation
• Round-the-clock support from logistics experts

By leveraging our digital platform, you can make informed decisions, optimize your shipping operations, and stay ahead of market fluctuations. Whether you're dealing with capacity constraints, rate volatility, or regulatory changes, FreightAmigo is here to support your logistics needs and help you thrive in today's challenging freight environment.

Stay tuned for our next market update, and don't hesitate to reach out to our team for personalized assistance with your shipping requirements. Together, we can transform the way you experience logistics and drive your business forward in the digital age.