-
Ocean freight rates in October will stay high and likely rise further as demand remains strong while congestion persists, according to the latest Asia Pacific Freight Report of Dimerco
-
The world’s busiest port, Shanghai, “stays severely congested” into mid-to-late October with more than five-day berthing waits
-
In terms of on-time performance, Shanghai is down to 21% while the second busiest port, Ningbo, is at 34.6%
-
Air freight rates are also staying high or moving up, partly due to increasing demand as shippers shift away from expensive ocean rates
-
Air rates are also driven by the fourth quarter peak season with pre-holiday shipments and e-commerce shopping
-
Demand is also seen to increase as more shipments are expected to move by air from China to the United States following the extended China-US trade war truce
Ocean freight rates in October will stay high and likely rise further as demand remains strong while congestion persists arising from typhoon backlogs, port capacity controls and the Golden Week holiday in China in the first week of the month, according to the latest Dimerco Asia Pacific Freight Report.
The global logistics service provider said the tight peak season is running longer than expected with demand not slowing down as expected. At the same time, lingering typhoon disruption and the back-to-back Mid-Autumn Festival and Golden Week holidays keep vessel schedules shifting into October.
The world’s busiest port, Shanghai, “stays severely congested” into mid-to-late October with more than five-day berthing waits. In terms of on-time performance, Shanghai is down to 21% while the second busiest port, Ningbo, is at 34.6%.
The report indicates that carrier capacity discipline and selective blank sailings keep trans-Pacific utilization high and rates firm to rising.
“Everyone expected October to mark the start of the slowdown, but the cargo hasn’t stopped and the overflow is still rolling forward,” said Ted Chen, Dimerco Express Group director for Ocean Freight Global Sales and Marketing.
“With carriers blanking sailings at short notice, the real risk isn’t port congestion, it’s space disappearing before you’ve booked it,” Chen said.
Rates in the Asia-Europe lane is proving to be the exception as it falls with carriers returning to the Suez route.
Air freight
Air freight rates are also staying high or moving up, partly driven by the expensive ocean rates that are pushing shippers to shift.
Rates are also driven by the fourth quarter peak season with pre-holiday shipments and e-commerce shopping.
“Port congestion is now worse than through the pandemic period and ocean rates have climbed back to near pandemic levels, so more cargo is likely to convert from ocean to air on transpacific and intra-Asia lanes through Q4,” the Dimerco report states.
Demand is also seen to increase as more shipments are expected to move by air from China bound for the United States, particularly previously held cargo that would now be released following a trade war truce agreed upon by US President Donald Trump and Chinese President Xi Jinping during their meeting late-September meeting in Washington.
The US-China truce is extended to January 10, 2027, with a US$30bn reduction framework still in talks.
“Bookings look quiet right now, but that’s the calm before the door opens. Once held-back China-US cargo releases and ocean congestion pushes shippers into air, the space will face some constraints,” said Kathy Liu, Dimerco Express Group vice president for Global Sales and Marketing.
Capacity to the US from most origins are tight, with Singapore at backlog and Thailand slowed by the recent flooding that affected operations at the Bangkok airport.
READ: Asia Pacific freight capacity tight with high demand, congestion issues – Dimerco July report
