Freight market report – May 2023
Capacity utilisation had remained high from Asia, primarily due to blank sailings and a slight recovery in cargo, but utilisation levels slipped due to China’s Golden Week holidays and while global air freight capacity was up 15% last month, rate levels still remain far above pre- pandemic 2019 levels.
Road and rail operations across Europe continue to be affected by industrial action in multiple countries. In the UK, train drivers across 16 operators announced strikes for the 12th, 13th, and 31st May and 3rd June, causing disruptions to passenger and freight transport across the country.
The blank sailing program in Asia continues to balance out demand and supply, with full vessels and rolled cargo featuring heavily at the start of the month.
May shaped up to be similar to April, with flat market volumes and rates stabilising, but any recovery in the container shipping market is likely to be overwhelmed by the flood of new vessels entering the market, putting pressure on carriers to keep rates stable.
• Rates in April were pretty stable and we are expecting to see the same in May
• BAF is expected to increase in May however not to levels originally expected
• Global schedule reliability has now risen 60.2% (53% Asia-North Europe)
• Carrier’s still actively looking to secure long term business with fixed rates on the table
After some stability in April, the air freight market is experiencing a downward rate trend due to additional capacity being deployed, during the busy summer period, with carriers now starting to compete for belly cargo.
Rate developments through April and into May were somewhat inconsistent, with some routes seeing reductions, while others have seen little or no change due to unpredictability of supply and demand, while jet fuel prices in Europe have been fluctuating more than usual due to the upcoming summer travel season
• Prices fell from all major outbound locations
• Rates from multiple origins are being held up by strong eCommerce activity
• Glut of new China-Europe capacity will depress air freight rates
• You can lock in longer term rates on core lanes, including SHA, HKG, SZX
While it’s typical for road freight rates to dip after the holiday season, this year’s drop is hitting harder than usual and the market appears to be recalibrating after a hefty, double-digit surge in 2022, but it’s doubtful we’ll return to pre- pandemic conditions, especially with capacity shortages remaining a major concern.
Spot rates in the European road freight market have experienced their second consecutive quarter of decline, marking a significant shift since the onset of the Covid pandemic.
• Some trades have seen a softening of rates, with volume falls and rising capacity
• Rates are expected to soften, but are likely to remain elevated due to supply side • pressures
• Fuel surcharges remain high and are yet to be reduced
• Two million unfilled European driver positions forecast for 2026
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