Global Freight Market Update: Navigating Shifting Trends and Challenges

Introduction

As we enter the second half of 2022, the global freight market continues to evolve, presenting both challenges and opportunities for shippers and freight forwarders alike. In this comprehensive update, we'll explore the latest trends across ocean freight, air freight, and trucking, as well as recent developments in customs and compliance. We'll also discuss how FreightAmigo's digital logistics solutions can help navigate these complex market conditions.

Key points from recent market data:

• Spot rates have fallen below long-term fixed rates for the first time since April 2020 on the transpacific eastbound (TPEB) route.
• Air freight capacity from Asia has almost returned to pre-lockdown levels, with increased demand for far east westbound (FEWB) lanes.
• The Uyghur Forced Labor Prevention Act (UFLPA) took effect on June 21, impacting imports from China's Xinjiang region.
• U.S. trucking market is seeing lower spot rates, down 20% year-over-year, while contract business gains more interest from carriers.

Ocean Freight Market Update

Asia to North America (TPEB)

The ocean freight market from Asia to North America is experiencing several notable trends:

• East coast congestion and intermodal challenges persist.
• Vessel capacity is opening up, but chassis shortages and long-dwelling containers continue to hinder inland operations.
• Spot rates have fallen below long-term fixed rates for the first time in over two years.
• Carriers are expected to balance supply and demand through blank sailings.
• Shanghai activity is ramping up following recent lockdowns.

In light of these developments, we recommend booking at least two weeks prior to the cargo ready date (CRD). For cargo ready now, importers might consider taking advantage of currently available space and softer floating market rates.

Asia to Europe (FEWB)

The Asia to Europe route is showing signs of increased activity:

• Volumes are picking up as we enter Q3, a trend expected to continue.
• The market remains relatively stable without a major surge in volumes.
• Economic and political uncertainty in Europe is influencing consumer confidence and demand for goods.
• Rates are mostly extended going into the first half of July.
• Overall space is starting to fill up again, with congestion in European ports causing delays and some blank sailings.

We recommend allowing flexibility when planning shipments due to anticipated congestion and delays.

Europe to North America (TAWB)

The transatlantic westbound route continues to face capacity constraints:

• Many service strings remain around 100% utilized, with carriers reporting full vessels until the end of July 2022.
• Vessel congestion in North America is beginning to improve but not back to normal.
• Rates are expected to remain stable through July, with no signs of steep decline in the near future.
• Space remains tight, but with some signs of improvement on certain loops for both USEC and USWC.

For this route, we recommend booking 4 or more weeks prior to CRD and requesting premium service for higher reliability and no-roll guarantees.

Air Freight Market Update

Asia

The air freight market in Asia is showing signs of recovery and increased demand:

• North China: Capacity ex-PVG has almost returned to pre-lockdown levels.
• South China: The TPEB market is strengthening with increasing rates.
• Taiwan: Month-end and quarter-end demand is strong, with space becoming congested on TPEB routes.
• Korea: Market demand remains soft, especially for the FEWB tradelane.
• Southeast Asia: Demand varies by country, with Thailand stable, Malaysia soft, and Vietnam decreasing.

Europe

The European air freight market is showing signs of stabilization:

• Demand is maintaining a stable level.
• Capacity has increased, and rate levels are starting to reduce, especially on the transatlantic trade lane.
• Jet fuel prices are expected to be reflected in carrier fuel surcharges in July.
• Freighter capacity is improving with better rates and lead times.

Americas

The air freight market in the Americas remains stable:

• Demand and capacity remain consistent, especially into Europe due to additional passenger flights.
• Ground handlers at major hubs (LAX, ORD, JFK) are busy due to consistent export volumes.
• Capacity into Shanghai has normalized, and carriers have resumed normal operations and schedules.
• Rates remain stable week over week, although fuel costs continue to fluctuate.

Trucking & Intermodal Update

US Import/Export Trucking

The US trucking market is facing several challenges:

• Ports on both coasts are experiencing vessel congestion and increased dwell times.
• Chassis shortages and empty return difficulties are affecting trucking capacity in several markets.
• West Coast labor discussions between ILWU and PMA may impact operations.
• Highway diesel fuel prices remain at record highs, affecting operating costs.

US Domestic Trucking

The domestic trucking market is showing signs of softening:

• Contract business is gaining more interest from carriers than spot loads.
• Tender volumes are down 20% year-over-year, although they climbed back at the end of May.
• Capacity has tightened in the South & Southeast markets due to produce season.
• Spot rates are down 20%+ year-over-year but crept up at the end of May.

Customs and Compliance News

Two significant developments in customs and compliance may impact global trade:

Uyghur Forced Labor Prevention Act (UFLPA)

The UFLPA took effect on June 21, 2022. Under this law, U.S. Customs and Border Protection (CBP) presumes that all goods made in whole or in part in the Xinjiang region of China, or by entities on the UFLPA Entity List, are made with forced labor and are prohibited from importation into the US. Importers should consult the Department of Homeland Security's UFLPA Strategy for guidance on complying with the law's due diligence requirements.

Increased Tariffs on Russian Imports

On June 27, President Biden announced that the U.S. will increase tariff rates to 35% for over 570 groups of Russian products. This tariff increase is set to go into effect on July 27, 2022. Importers should stay informed about the specific products affected once the full list is published in the Federal Register.

How FreightAmigo Can Help

As the global freight market continues to evolve, FreightAmigo's Digital Logistics Platform offers powerful solutions to help navigate these challenges:

• Real-time rate comparisons: Our platform allows you to compare door-to-door freight quotes for international courier, airfreight, sea freight, rail freight, and trucking solutions, helping you find the best rates in this fluctuating market.
• Shipment tracking: With connections to more than 1000+ reputable airlines and shipping lines, you can track your shipment status anytime, anywhere, providing visibility in these uncertain times.
• Customs clearance and cargo insurance: Our one-stop solution helps you manage customs clearance and cargo insurance, crucial for navigating new regulations like the UFLPA.
• Automated documentation: Streamline your operations with our automated shipment document generation, reducing the risk of errors and delays.
• Expert support: Our 24/7 logistics expert support can help you make informed decisions in this complex and rapidly changing market.

By leveraging FreightAmigo's Digital Logistics Platform, businesses can adapt more quickly to market changes, optimize their supply chains, and navigate the challenges presented by the current global freight market. Our comprehensive suite of tools and expert support can help you turn these market challenges into opportunities for growth and efficiency.

Conclusion

The global freight market continues to present a complex and evolving landscape. From shifting ocean and air freight trends to new customs regulations and trucking market dynamics, staying informed and adaptable is key to success in this environment. By partnering with FreightAmigo and leveraging our Digital Logistics Platform, businesses can navigate these challenges more effectively, optimize their supply chains, and position themselves for success in the second half of 2022 and beyond.

Stay tuned for more updates as we continue to monitor and analyze global freight market trends. For personalized assistance with your logistics needs, don't hesitate to reach out to our team of experts.