The ocean freight market from Asia to the US has weakened over the last month. On most routings, rates have fallen below contract levels, and vessel space is readily available. After a brief supply-driven peak during late July and August, volumes have slowed, and capacity has not been restricted enough to maintain the rate gains ocean carriers made over the summer.
In China, companies are preparing for an extended national holiday period, the Mid-Autumn Festival and Golden Week; most offices and factories will be closed from September 29 through October 6. Carriers have extended spot rates through October 14 in anticipation of weak demand during this period. However, aggressive blank sailings have been announced for October and November, as carriers attempt to reverse the downward trend in rates. There are reports that carriers are planning to continue significant capacity reductions through Lunar New Year (beginning February 10, 2024), the next extended national holiday in China. Volumes are not expected to increase significantly over the next few months, so carriers will likely double down on efforts to match supply to demand.
Capacity reduction efforts inevitably result in fewer sailing options and unreliable service schedules, so shippers will need to plan accordingly, booking early and remaining flexible on transit times.
On Europe to US trades, demand is similarly low. Ocean rates have fallen below pre-pandemic levels, but carriers have not yet taken aggressive action to reduce capacity. Until carriers make capacity adjustments, rates are likely to remain low.
Persistent low water levels at the Panama Canal have resulted in extended draft restrictions and a lower daily limit on the number of vessels that can pass through the canal. Container vessels are not experiencing significant delays, but some carriers are limiting the weight of cargo on Panama Canal services.
The air freight market is relatively stable on most trades. From Asia to the US, we will see demand surge leading up to holidays at origin and destination, resulting in brief periods of overbooked space and higher rates.
US export trades are also stable, though the impact of capacity reductions, specifically Transpacific Eastbound, will impact the availability of space on the return sailings.
Forecasting and early booking are always recommended.
Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!
VP, Pricing & Procurement
CV International, Inc.
Connect with us
Rachel serves as Vice President, Pricing and Procurement for CVI. Her responsibilities include vendor selection, contract management and negotiation, transportation pricing, FMC compliance, and international agent network management.
Rachel began her career in international shipping with CMA-CGM America. She joined CVI in 2011, gaining experience in various departments with a focus on inside sales and marketing for the company. In 2014, Rachel assumed the role of Manager, Transportation, working on service procurement and development of client proposals. She has served in her current position since 2018.
A native of Norfolk, Virginia, Rachel earned her bachelor’s degree from the University of Michigan in 2005. She holds a Master of Business Administration with a concentration in Maritime and Supply Chain Management from Old Dominion University.
– Rachel Shames, VP, Pricing & Procurement, CVI
Connect with Rachel