Weekly Update 5-12-23
Weak demand and rising capacity drive air freight prices lower
After a modest bounce during March, global air freight prices resumed their downward trend in April.
According to TAC Index, a leading price reporting agency for the sector, the overall Baltic Air Freight Index (BAI00) dipped a further 0.8% during the week to 1 May, to leave it lower by 42.5% over 12 months.
There were, as usual, regional variations, with Hong Kong (BAI30) up 1.1%, week on week, to leave it down 42.2% year on year, but Shanghai (BAI80) down 2.3% WoW, to leave it down 48.5% YoY – but with upper quintiles in the range of prices paid falling again after an uptick in March.
US imports up again in April as market mirrors pre-COVID ‘normal’
Amid all the doom and gloom on container shipping and the talk of an impending recession, U.S. imports are rising off their lows. Inventory-to-sales ratios are still much higher than pre-COVID, yet monthly imports are now either at or above 2019 levels, depending on which data source you use.
U.S. ports imported 2,020,197 twenty-foot equivalent units of containerized cargo in April, Descartes said on Monday.
That’s down 18% from a year ago, when American importers were frantically shipping in cargo. But it’s up 9% from March and 5% from April 2019, pre-COVID.
Labor Deal at West Coast Ports Comes Into View
Contract talks between unionized longshore workers and employers at West Coast ports appear to be headed into their final stretch following agreements on several major issues, potentially clearing the uncertainty that has been hanging over U.S. importers heading into their crucial fall selling season.
Some shipping officials familiar with the talks hope a tentative agreement could be reached by June, ending a contentious period in port labor relations that prompted some of the country’s biggest retailers and manufacturers to shift goods away from the region to avoid possible disruptions.