Asia and freight market update; August 2023

By Paul Kelly in News Posted: 18th, August, 2023

The container shipping line’s capacity management is driving rate recovery from Asia to the US, Europe and the Med, while the quiet summer period continued in airfreight markets during July, with spot rate indexes down 46% over the previous 12 months. 


Sizeable GRIs by Asia-North Europe ocean carriers have been imposed a number of times in August, but there are already signs that only a few will be sustained. 

Almost all the major lines followed Maersk’s GRI advisory of a minimum 40ft FAK rate, effective from the 1st August, and raised rates from Asia to the main North European hubs. 

With peak season demand “subdued” on this trade-lane, and more than 1.2m teu of new-build container ships, due for delivery before the end of the year, including several 24,000 teu behemoths, which will be deployed on the route, Asia-North Europe carriers will need to be judicious in their capacity management to avoid a further rates collapse. 

In contrast to Asia-Europe, the trans- Pacific trade-lane is showing further signs of a recovery, with carriers implementing trans- Pacific general rate increases (GRIs) in April, June, July and August, solely on the basis of current market conditions, which are tight, as evidenced by recent reports of cargo rolling in Asia. 

While vessel and draft restrictions on the Panama Canal have not affected most shippers yet, we are monitoring the queue of container ships waiting to transit the canal and the reduction in daily transits, because if delays increase, it would put more pressure on rates and vessel capacity.

On the trans-Atlantic freight rates from Europe to the US East Coast are back to 2020 levels, which means that the trans-Atlantic liner ‘’party’’ may be over for the shipping lines.

But, while rates may have dropped, they could also rise swiftly, as has been the case for other main trades, so shippers should act now and seize opportunities before the market rebounds.


June air cargo demand decreased by 3.4% year on year, while capacity was up 9.7%. The percentage fall in volumes was the lowest level since February 2022 and compares with a fall of 8.1% over the first six months of the year. 

The quiet summer period continued in air freight markets during July, with TAC Index data showing the overall Baltic Airfreight Index up +2.9% in the final week of July, leaving the index up +1.2% on the month, though down – 46.2% over the previous 12 months. 

Regional variations included a strong final week in the month in Hong Kong, with a gain of +2.9% driven by continued robust eCommerce business in southern China, leaving it only slightly lower by -1.3% MoM and putting the YoY change there at -42.6%. 

IATA’s latest figures for June saw both the manufacturing output Purchasing Managers Index or PMI (49.2) and new export orders PMI (47.1) below the 50 mark, indicating a decline in global manufacturing production and exports. 

Looking at performance indicators, IATA said that global cross-border trade 

decreased by 2.4% year on year in the month, reflecting the “cooling demand environment and challenging macroeconomic conditions”. 

European carriers experienced a 2.8% decrease in cargo volumes in June, which was an improvement on May and helped by transatlantic performance. 


The market appears to be recalibrating after experiencing a hefty double-digit surge in 2022, but it’s doubtful that it will return to pre-pandemic conditions, especially with capacity shortages remaining a major concern. 

Despite shrinking industrial production and rising costs, the need for road transport remains high. However, any demand is easily accommodated, even with reduced transport capability and less cargo space, which is mainly due to the prevailing shortage of drivers. 

The European road freight sector continues to show a picture of weak recovery, with unpredictable factors creating an uncertain, challenging and complex market environment. 

The market moderation seen in the second half of 2022 has spilled over into 2023 and as a result, the European road freight market is projected to lose speed in 2023, expanding by only 1.4% in real terms. 

Ti’s latest State of Logistics Road Freight Survey 2023 reveals that 84% of road freight companies are currently experiencing increased pressure on margins as costs soar and demand weakens. 

The stagnation in freight demand from Q4 2022 has continued into 2023, flattening the driver shortage curve, but nothing has changed in the long-term outlook of the profession and the share of young drivers remains extremely low. 

To sustain revenues carriers are investing in technology and value- added services, which may prove to be good long-term investments for shippers. 

Whatever challenges your supply chain may face, our commercial vehicle fleet and the price and capacity agreements we have in place with our long-term partner air and ocean carriers mean that we continue to deliver resilient and reliable supply chain solutions.

Our purchase order management and supply chain tracking technology support the most demanding global trading regimes, providing transparency and control.

EMAIL Andy Costara to learn more and see how our technology can support your supply chain.

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