Global Freight Market Update: Navigating Year-End Shifts and 2023 Outlook

Introduction

As we approach the end of 2022, the global freight market continues to evolve rapidly. This comprehensive update examines key trends across ocean, air, and land transportation, providing insights to help logistics professionals navigate the changing landscape. We’ll explore recent developments in major trade lanes, capacity shifts, rate fluctuations, and regulatory changes that are shaping the industry as we head into 2023.

Ocean Freight Market: Rebalancing Act

The ocean freight sector is experiencing a significant rebalancing as we close out 2022. Here are the key takeaways:

Asia to North America (Transpacific Eastbound)

Carriers have announced Lunar New Year blank sailings for Q1 2023, primarily scheduled 1-2 weeks before the holiday. This strategy aims to manage excess capacity and improve schedule reliability by easing port and terminal congestion. Notable trends include:

• Softening rates to the U.S. East Coast
• Signs of rate stabilization to the U.S. West Coast
• Improved conditions at Canadian ports, with Vancouver seeing reduced vessel counts and berthing delays

For shippers, we recommend booking at least 2 weeks prior to cargo ready date (CRD) and factoring in potential blank sailings when planning shipments.

Asia to Europe (Far East Westbound)

The Asia to Europe trade lane has seen a modest uptick in demand since week 48. Combined with an increase in blank sailings, this has led to tighter space availability leading up to the pre-Lunar New Year period. While rates remain under pressure, the decline has slowed due to a more balanced supply-demand situation.

Shippers should allow for flexibility in their planning to account for potential congestion and delays.

Europe to North America (Transatlantic Westbound)

Capacity on this route is set to increase by an average of 30%, primarily due to larger vessels entering service on routes to the U.S. East Coast from Northern Europe and the Mediterranean. Key points include:

• Reinstatement of weekly calls to New York and Savannah
• Expected continuation of downward rate trends into 2023
• Improving space availability, though not yet fully open
• Enhanced equipment availability as congestion eases

We recommend booking 3-4 weeks ahead of CRD and considering premium services for higher reliability and reduced roll risk.

Air Freight Market: Mixed Signals

The air freight market is showing varied trends across regions as we approach the holiday season:

Asia

• North China: Increasing demand for Transpacific Eastbound routes, with rising rates
• South China: Market pickup with space becoming congested; rate increases for both Transpacific and Far East Westbound routes
• Taiwan: Normal conditions, except for capacity constraints to Los Angeles
• Korea: Slight demand peak to U.S. West Coast before winter holidays
• Southeast Asia: Soft market with volumes shifting back to ocean freight

Europe

Demand to North American hubs has increased slightly before the holidays, leading to tighter capacity. Potential disruptions due to staff shortages, strikes, and weather conditions at major airports like Amsterdam, Frankfurt, and London Heathrow.

Americas

Export demand remains steady across markets, with U.S. airports operating normally. Capacity is opening up, especially to Europe, while rates remain stable week-over-week.

Trucking and Intermodal: Challenges and Opportunities

Europe

European trucking faces several challenges:

• Expected 10-15% general rate increase for 2023 due to inflation and operating costs
• Ongoing driver shortages and delayed truck deliveries affecting capacity
• Increasing interest in alternative fuels to reduce CO2 footprint

North America

The North American trucking market shows a mix of congestion issues and easing conditions:

• Ongoing congestion at Canadian ports and rail ramps
• Excessive rail dwell times in Memphis, Dallas, and Chicago
• Increased congestion at Savannah, Houston, and Oakland ports
• Declining highway diesel prices across regions

In the U.S. domestic trucking market:

• Truckload demand remains strong despite recession concerns
• Dry van capacity has tightened slightly
• Spot market capacity remains oversupplied
• Significant decrease in spot truckload rates since January

Customs and Compliance Updates

Several important regulatory developments are worth noting:

• Extension of 352 Section 301 exclusions by the USTR until September 30, 2023
• Increased CBP funding in the FY23 spending bill, including allocations for forced labor prevention, blockchain technology testing, and innovative technologies

Freight Market News and Economic Outlook

Recent reports highlight a shift in U.S. port dynamics, with major ports facing undercapacity issues rather than the overcapacity seen during the pandemic. However, industry experts anticipate a rebound in shipping volumes once inflationary pressures subside.

On the economic front, major central banks (Fed, ECB, and Bank of England) have implemented synchronized rate hikes to combat inflation. This coordinated approach may help stabilize exchange rates, though high interest rates are expected to persist through most of 2023.

Conclusion

As we navigate the complexities of the global freight market, staying informed about these trends and developments is crucial for effective logistics planning. At FreightAmigo, we understand the challenges faced by freight forwarders and shippers in this dynamic environment. Our Digital Logistics Platform is designed to help you adapt to these market conditions by providing real-time freight quotes, shipment tracking, and automated document processing. By leveraging our technology and expertise, you can streamline your operations and make informed decisions in this ever-changing landscape.

As we look ahead to 2023, the freight market will likely continue to evolve rapidly. Stay tuned for more updates and insights to help you navigate the challenges and opportunities in the coming year.