The <u>rebound in demand</u> that started in June continues to <u>keep rates up</u>. Some industry insiders are predicting this year’s version of peak season will last only through September, and will focus on stay-at-home goods like furniture, kitchenware and electronics, according to Ethan Buchman at Freightos. <ul> <li style="list-style-type: none;"> <ul> <li>Demand is keeping <strong>ships out of China very full</strong> – with carriers able to <u>charge premiums</u> to prevent shipments from being rolled – even as capacity is nearly back to normal.</li> </ul> </li> </ul> <ul> <li style="list-style-type: none;"> <ul> <li>Shippers from <strong>Asia to Northern Europe</strong> could face a<u> severe capacity crunch</u>, as well as rising rates. Last week saw <u>delays of 3-4 weeks</u> (longer to the UK) for first available vessels.</li> </ul> </li> </ul> <ul> <li style="list-style-type: none;"> <ul> <li>Air freights are likely to jump as shippers get frustrated with ocean delays.</li> </ul> </li> </ul> <ul> <li><strong>High rates while capacity increases</strong> and volumes have been down just highlights the extent to which ocean trends have been unprecedented and difficult to explain this year due to the pandemic. </li> </ul> <strong>Makes No Sense:</strong> Analysts point out that while U.S. GDP has hit a record 32.9% decline, transpacific shipping rates have hit a 10-year high! <ul> <li>Rates from China to the US continued to rise during the past week. The biggest rise was $463 to $3,167 per feu (China to US West Coast).</li> </ul> The situation is similar for air freight, although the return of some passenger flights will help increase cargo capacity - but only a little. <strong>OUTLOOK: </strong> The industry will need to manage both rising shipping costs as well as unstable demand from major international import markets. <figure> <a href="http://www.freightos.com"> <img src="https://insidefashionlive.net/wp-content/uploads/2020/08/Freight-Rates-Weekly-Aug-5-1024x200.jpg" alt="" srcset="https://insidefashionlive.net/wp-content/uploads/2020/08/Freight-Rates-Weekly-Aug-5-1024x200.jpg 1024w, https://insidefashionlive.net/wp-content/uploads/2020/08/Freight-Rates-Weekly-Aug-5-300x59.jpg 300w, https://insidefashionlive.net/wp-content/uploads/2020/08/Freight-Rates-Weekly-Aug-5-768x150.jpg 768w, https://insidefashionlive.net/wp-content/uploads/2020/08/Freight-Rates-Weekly-Aug-5-750x147.jpg 750w, https://insidefashionlive.net/wp-content/uploads/2020/08/Freight-Rates-Weekly-Aug-5.jpg 1140w" sizes="(max-width: 1024px) 100vw, 1024px" width="1024" height="200"> </a><figcaption>Source: Freightos.com</figcaption></figure> <h3><strong>Analysis</strong></h3> After China-US ocean rates fell for only the second time since the middle of May last week, prices crept up again this week, with carriers able to introduce their 4th General Rate Increase since the start of June, said Mr. Buchman. Air cargo rates from China to the US are climbing as well, and for the third straight week according to Freightos.com marketplace data, in part due to an influx of expected consumer electronics launches. Though global capacity has been trending up, the removal of some freighters out of China for maintenance, and the increase in demand driven by peak season electronics roll outs are combining to put pressure on prices. “A number of airlines [are] publicly quite bullish for September onwards. August is quiet, except it isn’t, which is a summary of the lack of consensus in the current market," according to Freight Investors Services. "Meanwhile, the market appears (at least on ex-APAC routes) to be pricing about 25% above its 2019 level for the time being," the service added. Demand from electronics exporters who are launching new products in Q3 is likely to keep putting pressure on air cargo rates.