This year we are not experiencing the traditional peak season from Asia to the USA as we've seen in the past. The shift in consumer spending on services, inflation, and an inventory correction may be taking place among some retailers, with Walmart and Target in the U.S. reporting that they are overstocked compared to current sales.

Expected demand and Trans-Pacific East Bound (TPEB) volume from shippers to get ahead of Golden Week is in question. The Freight All Kinds (FAK) market rate continues to soften, and mitigations are trending down as easing port congestion on the U.S. West Coast unlocks vessel capacity and demand for goods has softened.

Blank sailings continue to spot the market for September as the carriers look to reduce the number of anchored vessels at the ports, especially on the U.S. East Coast (USEC)—currently 40 at Savannah—and U.S. Gulf Coast (USGC)—now 21 at Houston.

While the decline in spot rates on the two major east-west trade lanes out of Asia appears steep, there is still a long way for spot rates to fall before they close in on 2019 pricing.

There's an ongoing correction in container freight rates, which may be a blip in the market still feeling the effects of China's lockdowns over the summer and local inventory surplus. 

We anticipate carriers will look at ways to control capacity to avoid rates dropping to pre-pandemic levels.  

Trade Lane Notables

• Asia to Europe: Demand is slowing down with no signs of the peak season. Congestion is still occurring in the major ports of Hamburg and Rotterdam, which has reached a critical level causing further delays and late return of vessels to Asia.  
• Europe to the USA: Rates are still high as capacity is very tight, especially to the U.S. East Coast (USEC). Equipment availability remains an issue for all E.U. origins, especially inland depots.   
• USA to Asia: Severe congestion on USEC is a big challenge as some vessels are omitting the key ports of Charleston and Savannah. U.S. West Coast (USWC) is relatively better, with Oakland and Seattle still having challenges.   
• USA to Europe: All carriers have stopped booking to Ukraine, Russia, and Belarus. Congestion persists in major European ports. Service from USWC to E.U. remains exceptionally tight due to void sailing and skipped ports caused by delays.   
• India to the USA: Rates are still high as capacity is very tight, especially to the U.S. on direct service lanes.