Over a month since the easing of the lockdown measures in Shanghai, Flexport said in its latest market update that Pudong Airport has already reached pre-lockdown levels of daily tonnage turnover.
The freight forwarder said Shanghai is also experiencing its "hottest week" in recent years which is leading to payload reductions ranging from 3%-10%.
"As a result, some cargo may be offloaded at the last minute and may cause service delays," Flexport said, warning that for Frankfurt (FRA) bound volume, there is a continuous expectation of delays of 2-4 days due to manpower shortages and flight cancellations.
"Far East Westbound (FEWB) demand continues to be stronger than that of TPEB due to the tight capacity in the market. The overall market is still trending downwards with airlines reducing rates for both lanes," it added.
Increasing Covid-19 cases in Shanghai
Flexport also said that Covid cases are increasing again in Shanghai but there has been no impact on air freight and trucking at the moment.
For the South China region — which includes the cities of Shenzhen, Guangzhou, Dongguan, and Hong Kong — the freight forwarder said TPEB market demand is stable while FEWB demand is slightly stronger.
For Korea, Flexport noted that demand in the market continues to be "low with rates dropping", particularly for FEWB.
"This trend will likely continue through the rest of the summer. Additionally, the potential for an e-cigarette import ban by the US leaves room for concern as e-cigarettes are a hot export commodity," it added.
Meanwhile, for Southeast Asia "demand ex-Thailand is weak with some air cargo shifting to the ocean."
"Carriers continue to ask around for cargo in the market. Ex-Malaysia the market continues to be soft with little sign of improvement. Ex-Vietnam the market remains soft with SGN demand and rates dropping slightly from last week," Flexport said.
In terms of ocean freight between Asia-North America, the freight forwarder said floating rates continued to trend downward in recent weeks and carrier capacity remains available.
"Whether there will be a true peak season on the transpacific eastbound (TPEB) this year remains unclear," Flexport said.
"Space and cheaper rates on the floating market continue to entice importers with fixed-rate contracts looking to take advantage of near-term cost savings," it added, noting that carriers are expected to better balance capacity than they have historically (pre-pandemic).
Flexport said chassis shortages and inland congestion continue to create snarls at the destination, while current ocean transit times are much-improved when compared to those seen earlier in the year and through much of 2021.
It added that rates also remain soft in many major pockets.
Large amount of blank sailings for Asia-Europe
Meanwhile, for Asia-Europe shipping, the freight forwarder said there have been a large number of blank sailings and omissions.
"Volumes have picked up in Q3. However, the overall market is relatively stable without a major surge in volumes," Flexport said. "There have been a large number of blank sailings and omissions."
It added that Europe's consumer confidence and demand level continues to be impacted by economic and political uncertainty.
The freight forwarder noted that due to this, rates are mostly extended or slightly reduced going into the second half of July.
"Overall space is starting to fill up again. Congestion in European ports is causing sailings to return to Asia late, resulting in additional delays and some blank sailings," Flexport added.
