The Asia Pacific market continues on its decline, with demand slipping further in advance of China’s Golden Week holiday during the first week in October. Ocean carriers are being forced to cancel sailings from Asia with little or no notice. At the end of August, carriers had cut just 3% of capacity during the four-week period that comprises Golden Week and the three weeks that follow. However, in the last two weeks, carriers have announced an additional 29 blank sailings.
In recent years, lines have become increasingly dynamic in how they stop rates from plunging, using blank sailings (announcing cancellations much closer to the voyage date than in the past), as well as slow steaming (decreasing speed of vessels to conserve fuel) and suspending services.
As of mid-September, THE Alliance is suspending one of their transpacific loops (PN3 – from Asia to the West Coast of North America) effective October 1st, in order to balance supply with decreasing demand. This takes approximately 11,400 TEUs of space out of the market. Many carriers are also expecting deliveries of new ships expected to be phased into usage towards the end of the year, which is making issues worse, forcing carriers to cut capacity even more aggressively. There are no meaningful indicators in the market that there will be a peak season this year.
The Europe to North America market continues in a similar trajectory. Rates are now below pre-pandemic levels and there is still no signal from the market that this is going to change. Space and equipment continue to be fluid, however, if the downturn continues, carriers will have to be creative in how they try to keep rates from slipping.
The air cargo market continues to be stagnant and due to the global economic downturn, there are no indications that there will be a strong peak season in Q4. Industry analyst CLIVE Data Services said that of the 10 major trade lanes assessed in the past month, only China – U.S. and Southeast Asia – U.S. recorded growth, with air cargo spot rates up 3% and 4% on these corridors. Rates out of China may rise slightly mid-October, with electronics giants such as Apple and Hewlett-Packard shipping in volume into North America.