Navigating the Shifting Tides: Global Freight Market Update for June 2022

Introduction

As we enter the second half of 2022, the global freight market continues to evolve, presenting both challenges and opportunities for shippers and logistics providers alike. In this comprehensive update, we'll delve into the latest trends across ocean, air, and land freight, examining how these developments are reshaping the logistics landscape. We'll also explore how FreightAmigo's digital logistics platform can help businesses navigate these shifting tides efficiently and cost-effectively.

Key highlights from recent market developments include:

• Spot rates falling below contract prices on east-west lanes
• Persistent congestion issues in major ports
• Increasing airfreight spend by shippers despite higher costs
• Ongoing labor negotiations at U.S. West Coast ports
• Record-high diesel fuel prices impacting trucking operations

Ocean Freight Market: A Sea of Changes

Asia to North America (Transpacific Eastbound)

The transpacific eastbound (TPEB) trade lane is experiencing significant shifts. For the first time since April 2020, spot rates have fallen below long-term fixed rates. This development signals a potential rebalancing of the market, though it's important to note that carriers are likely to continue managing supply and demand through blank sailings.

Key points for TPEB:

• East coast congestion and intermodal challenges persist
• Vessel capacity is opening up
• Chassis shortages and long-dwelling containers continue to hinder inland operations
• Shanghai activity is ramping up post-lockdown

Our recommendation: Book at least 2 weeks prior to cargo ready date (CRD). For urgent shipments, consider taking advantage of currently available space and softer floating market rates.

Asia to Europe (Far East Westbound)

As we enter Q3, volumes are picking up on the Far East Westbound (FEWB) route, a trend expected to continue. However, economic and political uncertainty in Europe is influencing consumer confidence and demand for goods.

Key points for FEWB:

• Rates are mostly extended going into the first half of July
• Overall space is starting to fill up again
• Congestion in European ports is causing delays and some blank sailings

Our recommendation: Allow flexibility when planning your shipments due to anticipated congestion and delays.

Europe to North America (Transatlantic Westbound)

The transatlantic westbound (TAWB) route remains tight, with many service strings at 100% utilization. While vessel congestion in North America is showing signs of improvement, it's not yet back to normal levels.

Key points for TAWB:

• Most June rates extended through July
• Space remains very tight, with some signs of improvement on certain loops
• Equipment availability is the biggest challenge, particularly in the Mediterranean basin

Our recommendation: Book 4 or more weeks prior to CRD. Consider requesting premium service for higher reliability and no-roll guarantees.

Air Freight Market: Navigating Turbulent Skies

The air freight market is showing varied trends across different regions, with capacity and demand fluctuations impacting rates and availability.

Asia

In North China, capacity ex-Shanghai (PVG) has almost returned to pre-lockdown levels. With month-end and quarter-end approaching, both demand and rates have increased, particularly for Far East Westbound (FEWB) lanes.

South China is seeing a stronger transpacific eastbound (TPEB) market with increasing rates. Taiwan is experiencing strong month-end and quarter-end demand, with space to major U.S. destinations becoming congested.

Europe

European air freight is maintaining stable demand levels. Capacity has further increased, leading to reduced rate levels, especially on the transatlantic trade lane. Jet fuel prices are expected to impact carrier fuel surcharges in July.

Americas

Demand and capacity remain stable in the Americas, particularly for routes into Europe due to additional passenger flights. Major U.S. hubs like Los Angeles, Chicago, and New York are experiencing busy ground operations due to consistent export volumes.

Our recommendation: For all trade lanes, continue to place bookings early to secure the best uplift options and routings.

Trucking and Intermodal: Navigating Road Bumps

The trucking and intermodal sector is facing its own set of challenges, primarily driven by port congestion, equipment shortages, and record-high fuel prices.

U.S. Import/Export Trucking

Several major U.S. ports, including New York, Savannah, Houston, and Norfolk, have experienced vessels at anchor during May. This has led to chassis shortages and difficulties in returning empty containers, particularly in the NY/NJ area. West Coast ports like Oakland and Seattle/Tacoma are seeing extended port dwell times of 12+ days.

U.S. Domestic Trucking

Contract business is gaining more interest from carriers than spot loads, largely due to fuel surcharge agreements. Diesel prices remain at record highs, significantly impacting fleet operating expenses. While tender volumes climbed back at the end of May due to the Memorial Day push, overall volumes are still down 20% year-over-year.

Our recommendation: Stay flexible and consider alternative routing options to mitigate the impact of port congestion and equipment shortages.

Regulatory Updates: Navigating New Waters

Uyghur Forced Labor Prevention Act

On June 21, 2022, the Uyghur Forced Labor Prevention Act (UFLPA) took effect in the United States. This new law 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 therefore prohibited from importation into the U.S.

Our recommendation: Familiarize yourself with the Department of Homeland Security's UFLPA Strategy for guidance on complying with the law's due diligence requirements and overcoming the forced labor presumption.

Increased Tariffs on Russian Imports

The U.S. has announced plans to increase tariff rates to 35% for over 570 groups of Russian products, effective July 27, 2022. This move is part of ongoing economic measures in response to the situation in Ukraine.

Our recommendation: Stay informed about these changes and assess their potential impact on your supply chain if you deal with Russian imports.

How FreightAmigo Can Help Navigate These Challenges

In these turbulent times, having a reliable digital logistics partner is more crucial than ever. FreightAmigo's comprehensive digital platform offers several solutions to help you navigate the current market challenges:

• Real-time Rate Comparison: With spot rates falling below contract prices in some lanes, our platform allows you to compare door-to-door freight quotes for various modes, ensuring you always get the best rates.
• Advanced Tracking: Our system connects with more than 1000 reputable airlines and shipping lines, allowing you to track your shipment status anytime, anywhere. This is particularly useful given the current congestion and delay issues.
• Streamlined Customs Clearance: In light of new regulations like the UFLPA, our one-stop solution for arranging customs clearance can help ensure compliance and smooth importation.
• Automated Documentation: Our platform automates shipment documents, reducing errors and saving time in an increasingly complex regulatory environment.
• 24/7 Expert Support: With market conditions changing rapidly, our round-the-clock logistics expert support ensures you always have access to the latest information and guidance.

By leveraging FreightAmigo's digital logistics platform, businesses can turn these market challenges into opportunities, ensuring efficient, cost-effective, and compliant shipping operations.

Conclusion

The global freight market continues to present a complex and evolving landscape. From softening spot rates and persistent congestion issues to new regulatory challenges, shippers and logistics providers must stay agile and informed. By partnering with a digital logistics platform like FreightAmigo, businesses can navigate these challenges more effectively, optimizing their supply chains for the current market realities.

As we move into the second half of 2022, staying ahead of market trends and leveraging digital solutions will be key to success in the freight industry. Keep an eye on our blog for more updates and insights to help you navigate the ever-changing world of global logistics.