Floating rates remain low, relative to long-term fixed rates in the Asia-North America lane according to the latest report by Flexport, and it added that some importers look to move on the floating market instead of contracted space in the short-term, while the shape of the market for the remainder of the year remains uncertain.
In its freight market update on July 5, the freight forwarder said for the lane, vessel capacity also continues to further open up although chassis shortages and inland congestion continue to pose issues.
Flexport noted that for Asia-North America, rates also remain soft in major pockets.
For the Asia-Europe shipping lane, it noted that overall space is starting to fill up again and congestion in European ports is causing sailings to return to Asia late, resulting in additional delays and some blank sailings.
"Volumes are picking up as we enter Q3, a trend that is expected to continue. Overall the market is still relatively stable without a major surge in volumes as of yet," Flexport said.
"There is still a lot of economic and political uncertainty in the European market which is influencing consumer confidence and demand for goods," it added, noting that rates are mostly extended going into 1H July.
Delays to continue through Q3
For Europe-North America, the freight forwarder said demand backlog is building up in North Europe ports due to congestion and high yard occupancy as it warned shippers to "expect delays in export container deliveries to last through Q3."
In terms of air freight, Flexport said Far East Westbound (FEWB) demand is stronger than that of transpacific eastbound (TPEB) due to the tight capacity in the market.
"The overall market has cooled down compared to last week but is expected to pick back up in these next few weeks. Rates on both trade lanes have decreased slightly this week," it added.
For Frankfurt (FRA) bound volume, the freight forwarder expects delays of 2-4 days due to manpower shortages.
For South China — Shenzhen, Guangzhou, Dongguan, and Hong Kong — it added that the TPEB market is "getting stronger" with rates increasing compared to the week prior.
Flexport said for FEWB demand increased compared to the week prior, however, rates maintain at similar levels as last week.
