Market Review: August

Shippers continue to navigate a mix of recovery and ongoing challenges across air, sea, and road freight, with varying degree of intensity around the globe. As we move through the third quarter, businesses must remain agile, with the potential for further disruptions still high.

Ocean freight is grappling with capacity constraints, port congestion, and looming labour disruptions. Airfreight is facing rising rates due to high demand and limited capacity on key routes from Asia. While in European road freight, spot rates are stabilising, but operational costs and a growing driver shortage remain significant concerns.

AIR
Airfreight markets are under pressure, with rates climbing for six consecutive months. Capacity remains tight, particularly on routes from Bangladesh and Asia, driving up spot rates significantly. Regional demand variations and ongoing logistical challenges continue to impact the sector’s outlook.

– Global average spot rates have surged 20% in July compared to 2023
– Spot rates from Bangladesh to Europe have tripled year-on-year
– Middle East to Europe routes lead in growth, with significant price increases
– Demand on Southeast Asia to North America routes is pushing rates higher

SEA
Sea freight continues to experience disruptions, with vessels fully booked into August and strong demand expected from Asia. Port congestion, strikes, and equipment shortages are creating challenges across key trade lanes, keeping rates elevated.

– Container vessels are fully booked until August, with high demand from Asia
– Port congestion persists, especially in Europe, with strikes in Hamburg and likely in the US
– Spot rates have risen, particularly in Trans-Pacific and Asia-Europe lanes
– Blank sailings on the Asia-Europe route due to capacity issues continue despite new ships entering service

ROAD

European road freight is seeing gradual rate stabilisation, but operational costs are rising, and the driver shortage remains a major issue. With nearly half of companies expecting difficulty filling positions, the sector faces ongoing challenges despite signs of economic stabilisation.

– Q2 road freight spot rates rose 3.5% compared to Q1
– Operational costs continue to climb, particularly in labour and maintenance
– Diesel prices remain volatile, though 5% lower than in early April
– The driver shortage is growing, with 48% of companies predicting hiring difficulties next year.

We continuously monitor the evolving logistics environment, to share breaking news and developments, so that you can make the informed decisions that will protect your supply chain.

To discuss any of the issues highlighted here, or to discover the value that PSP Worldwide would bring to your supply chain, please EMAIL our managing director, Colin Redman.