With our array of international freight and logistics services to and from the country, the U-Freight group notes the underlying trend for air cargo is downward.
The global economic outlook remains dim for the first half of 2023 and manufacturing has contracted for five consecutive months, which suggests air cargo volumes and rates will continue to shrink in the short term.
The latest data and anecdotal accounts indicate little, if any, surge in shipments ahead of Lunar New Year celebrations that began in China this week. Demand and rates out of North China ticked up before the holiday, but the opposite occurred in South China as some factories began to close early.
Normally, shippers increase exports ahead of the holiday to make up for a one-to-two weeks of factory closures.
With a wave of positive COVID cases hitting China after the government removed some restrictions on reopening, some factories may take a multi-week break this year, according to some reports from China.
Despite the slow production, capacity is likely to get tight as carriers cancel all-cargo flights while Asia hasn't seen the same recovery of passenger flights as in the trans-atlantic corridor.
Trucking capacity will also be tight as drivers visit their home towns to celebrate the holidays. Rates out of China to North America and Europe are more than 30% lower than a year ago. Despite these price declines, fuel, labour costs and lower capacity are keeping air cargo rates about two-thirds above 2019 levels, according to analysts.
You can find more information about the U-Freight Group’s international freight and logistics services on this website or by speaking to your usual contact in our company.