Falling import volumes into North Europe amid rapidly deteriorating economic conditions have not provided any relief for hub ports in the region as logistics challenges mount.
Elevated demand for rail cargo on the only viable China-Europe rail route continues to overwhelm the existing infrastructure, with congestion building at Central Asian intermodal points.
Modest growth in freight volumes will continue in the second half of the year even if inflation and oil prices remain high, according to trade economists who spoke at the SMC3 conference this week.
Rate levels on the major trade lanes out of Asia should be rising as peak season begins and key destination ports remain congested, but the spot market has continued to decline.
Ocean carriers could find themselves under pressure from shippers to revisit long-term contracts as spot market rates tumble on the trans-Pacific and Asia-Europe trade lanes.
US retailers’ stockpiling of inventory has not only swelled the number of import boxes sitting on marine terminals and railheads, it has also left thousands of chassis idled with unopened containers on top of them at distribution centers around the country.
The air freight industry is seeing a welcome increase in the urgently needed long-haul belly cargo capacity available to the market as international travel starts picking up.
South Korea’s shipowners’ association said penalties imposed by regulators would damage the country’s link to the global supply chain and lead large foreign carriers to avoid South Korean ports.
Already congested ports in North Europe are bracing for a spike in volume this summer following the lifting of COVID-19 lockdowns in China, but deteriorating economic conditions in Europe could cause demand to drop in the fourth quarter.