Market Update – 4th August 2023

More than 10,000 rail freight trips have been made from China to Europe this year alone🚆  

The latest figures from China State Railway Group confirmed that over 1.08 million containers of goods have been shipped so far, which is a 27% increase compared to the same period last year.  

It comes as China Railway has increased capacity, added routes, and improved land port construction – contributing to the overall resilience of international trade and supply chains. 

What is perhaps a bigger surprise is that the record storms that have been wreaking disaster across the country have had little impact on Eurasian rail. 

The situation is stable, at least for Silk Road trains, because the floods are taking place in regions that are not significant in terms of rail freight. Nevertheless, major infrastructure problems were not avoided in China, with reports concerned about delays in global supply chains that could intensify by potential labour shortages given the emergency. 

In other news:  

Land 

• Following a significant price decline at the start of the year, the average price-per-mile for haulage and courier vehicles has risen by 4.4 percentage points since February, increasing steadily every month, according to the latest TEG Road Transport Price Index. 

• Major investments are being ploughed into European rail freight infrastructure, including in the UK, despite the latest Channel Tunnel results indicating still-declining volumes.
• America’s railroads and ports have eased the congestion that has weighed on their operations, but that has not improved their intermodal fortunes.  

• Yellow, the third largest LTL carrier in the United States, has shut down and is about to file for bankruptcy. 

Air 

• According to the two leading freight forwarders, little change is expected in air cargo market conditions in the coming months as weak demand, increased capacity and downward price pressure remain dominant. 

• Global air freight spot rate declines 40% for fourth consecutive month. Last month saw a 7% YoY capacity recovery as airlines’ summer schedules stepped up to meet heightened passenger traffic. 

Sea     

• Container leasing companies reported a slowdown in returning cases from carrier customers in the second quarter and said they were optimistic that equipment demand would pick up in the second half of the year.  

• The rate of decline in profitability of ocean carriers is accelerating as East-West trade routes continue to struggle with weak demand, leading to persistently low freight rates.  

• Container lines – mainly those operating on the China-India trade route – are strengthening their networks in preparation for a possible resurgence in the intra-Asian market.    

Industry news 

• Merchant vessels are increasingly avoiding the Black Sea as the northern and western edges are increasingly impacted by the war. 

• A tentative agreement was reached between Canada’s government and port officials this week, preventing a strike that could have impacted global shipping. 

• America’s Federal Maritime Commission (FMC) this week unveiled plans for a major shake-up in the collection and return of containers in a bid to alleviate future bottlenecks.  

Looking forward 

That’s it for this week’s report, if you have any questions about the stories covered today or need support with your current supply chain, please get in touch.