Navigating the Shifting Tides: Global Freight Market Update for Early 2023

Introduction: A New Year, New Challenges

As we step into 2023, the global freight market continues to evolve, presenting both challenges and opportunities for businesses worldwide. In this comprehensive update, we'll explore the latest trends across various shipping routes, examining capacity changes, rate fluctuations, and regional insights. We'll also discuss how FreightAmigo's digital logistics platform can help you navigate these changes effectively.

Key highlights from recent market data include:

• Increasing capacity in the Transpacific Eastbound (TPEB) routes
• Softening rates across multiple trade lanes
• The impact of the Lunar New Year on shipping volumes
• Changing dynamics in the North American trucking market
• Evolving customs and compliance regulations

Let's dive deeper into these trends and their implications for global trade.

Ocean Freight Market: A Sea of Changes

Asia to North America (TPEB)

The Transpacific Eastbound (TPEB) trade lane is experiencing a significant shift. Capacity is on the rise, while rates remain relatively flat following the Lunar New Year period. We anticipate an increase in blank sailings over the coming weeks, which could impact shipping schedules. For businesses relying on this route, it's crucial to book at least two weeks prior to the cargo ready date (CRD) and keep an eye on upcoming blank sailings.

Asia to Europe (FEWB)

The Far East Westbound (FEWB) route is seeing eased space availability post-Lunar New Year, with a considerable drop in volume levels as China resumes work. Rates are moving downwards due to low demand. However, high post-Lunar New Year blank sailings in weeks 6, 7, and 8 are expected to adjust for the decrease in demand. Flexibility in shipment planning is recommended due to anticipated congestion and delays.

Europe to North America (TAWB)

The Transatlantic Westbound (TAWB) trade is experiencing a continued downward trend in rates, expected to last for the coming months as demand is not picking up at the same pace as in 2022. Space availability is improving for both U.S. East Coast (USEC) and U.S. West Coast (USWC) destinations due to easing congestion. To ensure reliable service, consider booking 2-3 weeks prior to CRD and requesting premium service for higher reliability and no-roll guarantees.

Indian Subcontinent to North America

The Lunar New Year has brought blank sailings and equipment issues to this route, as the lack of Chinese imports results in fewer containers being repositioned. This situation is expected to continue into early February. Rates are dropping week over week, while capacity is being removed as carriers implement blank sailings. To mitigate these challenges, consider procuring equipment from wet ports rather than inland container depots and diversify your carrier strategy for better coverage.

North America to Asia

Capacity is readily available across all major services on this route, with supply far outpacing demand. Congestion has cleared across most North American container yards, leading to improved operations. While the agricultural season kicking up in Q1 may impact capacity availability, the outlook suggests that supply will remain greater than demand. Booking 1-2 weeks prior to CRD is recommended for coastal to Asia-based port lanes, and 2-3 weeks for inland to Asia and feeder port lanes.

North America to Europe

Capacity from the U.S. East Coast (USEC) is available, while services from the Gulf and U.S. West Coast (USWC) remain tight. The market is generally stable, with most USEC to North Europe (NEU) and Mediterranean (MED) services having low capacity utilization levels. Gulf Coast services continue to have medium to high utilization levels, while USWC to NEU and MED services are still very limited in options. Booking recommendations vary by origin, ranging from 2 weeks for USEC to NEU/MED lanes to 4 weeks for PSW to NEU lanes.

Air Freight Market: Navigating the Skies

The air freight market is showing varied trends across different regions:

Asia

Market rates decreased significantly during the Lunar New Year holiday period in North China. South China is expecting a gradual resumption of cross-border traffic with the lifting of COVID measures. Taiwan's market is operating normally, with potential cargo offload due to high passenger demand before Lunar New Year. Korea is seeing increased demand for Transpacific Eastbound (TPEB) routes, while Far East Westbound (FEWB) market trends downward. Southeast Asia generally has low demand and widely available capacity, except for Hanoi, which is experiencing a pre-holiday rush.

Europe

Demand has increased as production operations return to normal after the holiday period, reflected in rising rate levels. Lead times are currently stable, with airline utilization high and uplift procurable within 2 days of cargo ready date (CRD). No significant disruptions or congestion have been recorded across the main EMEA hubs.

Americas

Export demand remains steady from all markets, with U.S. airports running at a normal pace. Capacity is opening up further, especially into Europe, while rates remain stable week over week.

Trucking and Intermodal: Road and Rail Updates

Europe

The trucking industry in Europe is facing challenges due to inflation and soaring operational costs. A general rate increase (GRI) of 10-15% is expected for 2023, excluding fuel surcharges. Despite declining container volumes, capacity remains fragile due to a continuous shortage of drivers and delayed delivery of newly ordered trucks. On a positive note, there's an increasing interest among trucking carriers in alternative fuels to decrease their CO2 footprint.

North America

The North American trucking market is experiencing several trends:

• Continued congestion at Canadian ports and rail ramps, particularly in Vancouver, Toronto, and Montreal.
• Excessive rail dwell times and congestion in Memphis, Dallas, and Chicago.
• Increased congestion, vessel bunching, and multiple vessels at anchor in Savannah, Houston, and Oakland.
• A drop in highway diesel prices across all regions.

The U.S. domestic trucking market is seeing rapid demand erosion due to overstuffed inventories and eroding consumption. These conditions are forecast to persist through at least the first half of 2023, leading to a spot market filled with discounted freight during what is typically the slowest time of the year for domestic trucking.

Customs and Compliance: Regulatory Landscape

Several important developments are shaping the customs and compliance landscape:

U.S. Appeal of WTO Ruling on Hong Kong Marking Requirement

The United States has submitted a notification of appeal challenging the World Trade Organization (WTO) dispute settlement panel's decision regarding the U.S. requirement for goods made in Hong Kong to be marked as made in China. This appeal is currently in legal limbo due to the WTO Appellate Body's inability to hear cases.

UFLPA Region Alert Deployment

U.S. Customs and Border Protection (CBP) has announced the deployment of the Uyghur Forced Labor Prevention Act (UFLPA) Region Alert enhancement to the Automated Commercial Environment (ACE) on March 18, 2023. This update will add new validations to ACE that may impact Cargo Release and Manufacturer Identification Code (MID) applications where a valid Chinese postal code is required.

UFLPA "Exception Requests" Under Review

CBP is currently reviewing the first two "exception requests" under the Uyghur Forced Labor Prevention Act (UFLPA). These requests are made when merchandise is detained under the UFLPA and has a connection to Xinjiang or to an entity on the UFLPA Entity List. If an exception is granted, CBP must submit a report to Congress and the public detailing the goods and evidence considered in reaching the determination.

Freight Market News: Industry Insights

Europe-US Rates Decline but Remain Elevated

Despite recent declines, Europe to U.S. East Coast spot rates remain almost triple their pre-pandemic levels and more than triple the rates in the Asia-U.S. West Coast market. The increased popularity of U.S. East Coast ports, a result of pandemic-related congestion along the West Coast, is expected to persist even as some volume shifts back.

Capacity Control to Stabilize Rates

Recent research suggests that container freight rates will be largely determined by how liner operators control their shipping supply, rather than cargo demand. Shipping lines agree that stabilizing freight levels would maximize profits, as opposed to focusing on increasing market share.

How FreightAmigo Can Help Navigate Market Changes

As the global freight market continues to evolve, businesses need a reliable partner to help them navigate these changes effectively. FreightAmigo, as a full-service, one-stop digital supply chain finance platform, offers several key advantages:

1. Comprehensive Rate Comparison

With FreightAmigo, you can easily compare door-to-door freight quotes for international courier, airfreight, sea freight, rail freight, and trucking solutions. This feature allows you to make informed decisions based on the latest market rates across various modes of transport.

2. Real-Time Shipment Tracking

Our platform connects with more than 1000 reputable airlines and shipping lines, enabling you to track your shipment status anytime, anywhere. This real-time visibility is crucial in managing your supply chain effectively, especially during periods of market volatility.

3. Streamlined Customs Clearance and Insurance

FreightAmigo simplifies the process of arranging customs clearance and cargo insurance. This is particularly valuable given the evolving customs and compliance landscape, helping you stay compliant with regulations such as the UFLPA.

4. Automated Documentation

Our digital platform automates shipment documents, reducing the risk of errors and saving you valuable time. This feature is especially beneficial when dealing with complex international shipping requirements.

5. Expert Support

With 24/7 logistics expert support, FreightAmigo ensures that you have access to professional assistance whenever you need it. This support can be invaluable when navigating market changes, such as capacity fluctuations or rate volatility.

6. Integrated Digital Solutions

By combining artificial intelligence, big data, FreighTech, FinTech, InsurTech, and GreenTech on one platform, FreightAmigo offers a comprehensive digital logistics solution. This integration allows you to adapt more easily to market changes and optimize your logistics operations.

Conclusion: Staying Agile in a Dynamic Market

The global freight market in early 2023 presents a complex landscape of challenges and opportunities. From capacity shifts in ocean freight to evolving air cargo trends and regulatory changes, businesses must remain agile to thrive in this environment.

By leveraging FreightAmigo's digital logistics platform, you can gain the visibility, flexibility, and efficiency needed to navigate these market changes effectively. Our comprehensive suite of tools and expert support enable you to make informed decisions, optimize your shipping strategies, and stay ahead in an ever-changing global trade landscape.

As we move further into 2023, stay tuned for more updates on market trends and how FreightAmigo continues to innovate to meet the evolving needs of the logistics industry. Together, we can transform the way you experience logistics and drive your business forward in the digital age.