North America Freight Market Update Live

The below transcript has been generated by an AI system and may contain inaccuracies, errors, or omissions. While efforts have been made to ensure the accuracy of the content, the AI-generated transcript should not be considered fully reliable or definitive record.

Nathan Strang

Alright. Hello, everyone. Happy Thursday. Welcome to this month's freight market update. My name is Nathan Strang. I am director of Ocean Freight here at Flexport. Really great webinar for you today as always. But before we begin, we're gonna go through a couple housekeeping items that'll, help to make the webinar better for you, I hope. So if you look over to the right side of the main screen, you're gonna see a couple of, buttons over there, one that says chat. Chat's kind of for us to just post announcements or or any updates or housekeeping items. As you can see, Carol just posted right now. If you go over to docs, that's where you can, download some items or, even visit some of our our cool, websites for more information. So we have our live tariff blog. We have our ocean timeliness indicator, Flexport Atlas, which is our cool interactive, map, upcoming webinars, and then, of course, today's slides. So if you wanna download the slides for today and use them, with your team or just keep them for, reference later, you can do that. And then the last button over there is q and a. We very much encourage questions, so go ahead and drop some questions in there. We will get to them at the end of the webinar. We'll leave about the last eight to ten minutes for questions, hopefully. So on to, the webinar. So but before we start, a brief legal note. Please keep in mind that all information provided in this session is based on the situation at this current time and may not be customized to your specific business requirements. We always recommend reaching out to a Flexport expert to discuss your particular situation. Alright. Again, my name is Nathan Strang, director of Ocean Freight. Joining me today, as always is Kyle Bolu. He is our head of ocean for, ocean Americas, and David Grindelwald, who is our regional director of air freight at Flex Our agenda for today, we're gonna go through an operations update presented by myself over to Kyle for Transpacific Ocean update, and then Dave is gonna give us an air freight update followed by the q and a. For operations, I wanted to highlight a little bit on volumes. We've been, there's been a lot of discussion around, you know, kind of imports with what's going on with tariffs, what's going on with the import landscape, what's going on with the economy. So So just kinda wanna give you an idea of kind of where we are. So what are we looking at right now? After a pretty strong 2025, we've seen imports into the West Coast slip slightly. Both the LA and Long Beach ports are down about one and a half percent. We've also seen some of the larger ports on the East Coast, Charleston, Savannah come down. Oakland particularly impacted, as well. They've had some service readjustments. Fewer vessels are calling Oakland year over year and month over month. And then also reduction into the Northwest. So where is the cargo going? We've seen an increase. Portland's a little bit of an outlier there. They don't do much volume, so any kind of change to Portland, will, drive that. But I like to throw it out there, and then also it's a good advertisement for for that container port. But Virginia is picking up a lot of space. So Virginia's been kind of, showing a lot of gains in efficiency. A lot more vessels are calling there. It's a great gateway kind of into the middle part of the East Coast of The United States, so they're seeing a lot of growth on the East Coast. Port Of Vancouver has picked up. A lot of rail improvements and on dock improvements in Vancouver have made it kind of the a rail discharge port of choice on the West Coast, especially going into Chicago, and into the to The US Midwest. And then Houston. Houston's growth continues. They've seen strong year over year, strong month, year over year growth, strong month over month growth. We've seen a lot of, containerized cargo going into Houston. Improvements to the ship canal have really, allowed larger vessels to get in there and heavier vessels to go into the Port Of Houston. The the limitation to Houston is there's really only two container terminals there, and they're very limited in size. And they're also going through some maintenance and improvements. And anytime that happens, it's gonna cause disruptions. So we are seeing Houston pickup. The other thing that's driving Houston growth is on the Transpacific services. The Port Of New Orleans is no longer a call. So that's on transpacific services. So transatlantic services, Latin America services, they still call the Port Of New Orleans, but transpacific service is no longer called New Orleans. So a lot of that cargo is going to Houston, and then some of it is also gonna go over to Mobile. So it's picking up that. These were, kind of US import forecasts, based on the the numbers that we're seeing out there. So there's kind of different methodology in in in how they calculate these numbers. But both methodologies come out with a a reduction in in March volume. So we did see a drop in in March volumes. Not totally unusual for this time of year, but it is a much larger drop than we saw last year. It's about twice as much as what we saw last year in in month over month, volume change. That said, the San Pedro Bay ports still lead. So that's your LA Long Beach ports there. The you know, their combined volume is still more than most of the East Coast. So you can see that compared to Savannah, which is one of the larger East Coast ports there. So, overall, as the message on this slide, overall trend is that we're still seeing a little bit of cargo slipping over to the East Coast for various reasons. A lot of changes in warehousing, a lot of changes in, you know, direct to consumer. Things like that are driving that. Houston is still very popular. Similar reasons. But, you know, the majority of the cargo in The United States is very much coming into the into the West Coast. Operations impact, just a couple things I wanna call out in this slide. We'll kinda walk through it here. But relatively good, performance to the Pacific Northwest, Canada, and through The US West Coast, so we're not seeing any issues there. East Coast, Savannah, one of their limitations is they're on a river, so they suffer greatly from things like fog and storms and weather. It is that season for them. So we're still seeing about one to two days of, vessel weight at anchor. Interesting one here is South America. We're continuing to see some disruptions out of there. One of the reasons for that is, kind of ripple effect of US tariffs. South American soybeans have become very, popular. Soybeans are a commodity that can move either containerized or bulk, but a lot of it is moving containerized out of South America. It's taking up a lot of the container space, and we're seeing delays there. And then weather disruptions in the soybean production means that there's a lot of bunching. So rather than the the the harvest and the crop being spread out, delays of getting that product to port are causing those bunching, and they're kind of taking precedence on the vessels as they're paying a bit of a premium to get that commodity out. Europe, very much the same as we've been seeing over the last few webinars. I feel like, you know, I I I repeat this over and over, but heavy berth congestion, two to three days delays across most of those, ports. Gulf, and the Red Sea, no change there. The Strait Of Hormuz is still very much, nonoperational. It is closed. So the Jebel Ali Port is not is not available. If you have cargo moving into the Middle East, that you still need to go there, there are trucking options across Saudi Arabia or, Oman. So those can be explored. And we have not seen a widespread return to Suez. We've seen a couple service announcements. I know they make the news, but it has not been sort of a a widespread movement in the in the market. Indian Subcontinent equipment situation is getting much better there as we get further away from you know, as the as the conflict kind of drugs drags on. South Asia, not too bad out of Singapore. China, we are seeing some pretty high disruptions in Qingdao due to congestion and weather and also maintenance kind of all piling on each other. But other ports are there kind of normal, two to three day delay. The Philippines has been fighting birth congestion for a while now. If you're moving out of Milanila and North, especially, you're gonna see three to four day delays. And that's our operational roundup. I'll hand it over to Kyle.

Kyle Beaulieu

Okay. Thank you, Nathan. TPEB update. So first, we're gonna talk about TPEB supply. So on the supply side, the last couple FMUs, we talked about how overall capacity remains stable and healthy, despite the situation in the Red Sea. So basically, we had a straight line of deployment for almost eight weeks after post c n y blanks, but the situation has changed for May and supply is tighter now than it's been for most of 2026. So what's happening here in May? So due to the May Day holiday, carriers removed capacity from the market, for a few weeks in May, but demand did not really slow down as a result of the holiday. So as a result, there are bottlenecks in the trade as about 25% of capacity was removed from the market for week 20, which is this week. So roll pools have started on some corridors, and available capacity has tightened as we head into the May. Now the outlook is good on the supply side. So deployment is increasing. You can see there to around 90% for the May and the June. This will likely drop a little bit due to service disruptions, likely end up closer to the mid to high eighties, which would be a slight uptick from what we're used to for most of April, and that might balance things out a bit again on the demand side. Now the open question is whether there will be a demand increase that would keep utilization up throughout June and, in essence, be an early peak. If you look at the past two years, peak was early er than traditional. So it was in, June and July, but last year was heavily influenced by tariff changes. And years before that were impacted by COVID shipping patterns. So there's not really a strong historical trend to refer to for in the past three to five years to sort of project what June and July might look like. But at least for now, the May, is tighter from a capacity standpoint than we've had for most of 2026. So now let's take a look at rates. So, there has been a uptick globally. So the tighter capacity hasn't totally hit, rate levels yet, but a general upward trend post March 1 continues, but the rate dynamic has changed. So March and April, the increases were primarily driven by fuel increases and cost management, which we've talked about the last couple FMU webinars due to those rising global bunker costs. Now for May, fuel is still an influencing factor for base costs. It's just higher to operate now than it was back in February, but the demand supply balance is now a bigger factor on TPEB for the second half of of May as we head into GRIs, for mid May. Now globally, carriers have continued to have emergency fuel charge fuel surcharges or bunker adjustments due to fuel costs, and those have kept rates elevated post March 1. Far East Westbound, is seeing a similar May supply restraint as TPEB as they also had blanks in the market, for projected demand drop, with the Mayday holiday, but, they're seeing restraints as well, and so they're having a rate rebound in May as well. So based on current conditions, at least for for lanes from Asia, shown here, everyone should expect elevated rate levels to continue through the end of the month. Now we'll go over to David, for an error update.

David Grinevald

Alright. Thank you very much, Kyle. Good morning. Good afternoon, everybody. We're gonna be talking about the movements that we're seeing on the air freight market. So for those of you who ship air, I'm sure you have had noticed that the rates had been increasing for the past couple of weeks, and we have now entered a plateauing phase where overall worldwide global rates are actually about $3.29 a kg. And this shows that the pace has eased into more of a wait and see mode. The main phenomenon at play here is that we're seeing a decoupling between rates and volume, meaning that, rates kept on rising even though tonnage fell 2% in early April and 7% week over week, but we'll explain why that happened. Actually, in the, in mid April around Mother's Day, there is usually always a surge in volumes, because of the flower imports from Latin America and Africa. And there is also front loading that happens right before the May Day holiday in China as importers try to get their cargo out of there before the holiday. So it is not surprising that we're seeing a minus 7%, which may look actually more dramatic than it actually is. Another interesting phenomenon is the price gap year over year. If we look at the way that prices were behaving in 2025, versus the way they're behaving this year, The price delta is actually expanding, which is mostly driven by fuel cost as we will see, in the next couple of slides. So obviously, the big story remains what is going on in The Middle East. And as we had discussed in the previous FMU Live webinars, the repercussion of The Middle East situations situation are global. A ceasefire was in effect but broke down on May 4 because of renewed hostilities. The airspaces are still open, in The UAE and in Qatar, and the large hubs that are Dubai and Abu Dhabi Airport are scaling up. However, many foreign carriers face flight caps and slot restrictions, and because of the renewed hostilities, flash closure of those air spaces remain possible and actually have occurred. A big story that we're also following from one FMU to the next is what's going on with what we call the big three, which are the big three Middle Eastern air carriers. So it's actually an interesting situation because if you look at their destination networks, they can claim that they're back to 95%, but the actual capacity is probably closer to 75%. The operational reroutings have improved, meaning that some of the trajectories that your aircraft have to take on some routes are actually shorter than they were at the beginning of the war when we had more airspace closure. But we still have some no flight zone and also issues with insurance, meaning that a lot of insurance carriers are telling the airlines, yes. You can technically fly over those countries, but if you do, we will not insure you, which obviously leads the airlines to take the longer routes. The other big part of the story, obviously, is the fuel supply and pricing crisis. So as we have said in the past, the global jet fuel price prices, sorry, have surged over a 100% year over year. We are now standing at twenty three year highs. The Strait Of Hormuz blockade is sustaining also war risk premium and inflating those fuel charges. What we are seeing is a bit of an erratic position from the airlines. By the way, the legend here is that whatever fuel surcharge you see in red means that it was actually increased, by the airline as of their latest update. If you see it in green, it means that it was actually decreased. It's interesting to see that some of the top carriers that we're now showing on the slide are increasing their fuel surcharge as opposed to others that are decreasing it. And that is because and and I'm sorry because the graph is a little small, but we're actually seeing in the last two weeks, very much up and down movements on the price of jet fuel, and airlines are trying to remain competitive while also making sure that they're not bearing the brunt of this increase in fuels fuel charges. Beyond just the cost of fuel, there is also this issue of capacity. I about 19 out of the 20 top airlines in the world have actually been canceling flight. The most impressive announcement probably made by Lufthansa that announced that they were canceling 20,000 flights off of their summer schedule. I will go very quickly on this slide because we wanna make sure that we keep some time for the q and a at the end. The the the the majority opinion in the air industry right now is that the peak of rates is probably behind us. But because what is driving the rates right now, meaning the situation in The Middle East and the price of fuel is such a rapidly evolving situation, I think it's it's safe to say that we are just monitoring the situation on a daily basis and see where we go. And very quickly at the end, a very traditional slide for those of you who follow the FMU Live, the state of capacity and rates out of the China and Southeast Asia area. North And South China are actually slowed down in terms of demand. Taiwan remains high in terms of rate because of the sustained demand from high-tech and hyperscaler. Vietnam, which is a country that concerns a lot of our customer, the demand has softened lightly. And for the rest of Southeast Asia, I will let you guys take a look at the slide, and, of course, we encourage you to download them so that we can, keep some time for the q and a now.

Nathan Strang

Helps helps if I unmute. Alright. Going into q and a. I think we're gonna take it off with a operations question first. Also, if you remember, on the right side, you can drop your questions in there. We'll try and get to as many of these as we can. So, first question I got is a question on Gainesville, Georgia. So there's a new inland port open there by the, Port Of Savannah that controls that. And is it a good option if moving cargo into Northern Georgia versus Atlanta? I think it can be. The Atlanta railheads, tend to be very congested. There's limited routings that allow you to get into Atlanta. They're, you know, your traditional traditional railheads where it's kind of a mix of cargo coming from a lot of different places going in there. They're closer to downtown, which, you know, can can cause congestion and getting in and out, whereas the inland rail, is Northeast of the city pretty far, and, very fluid gates. You don't need appointments. You can go in and out. Easy to easy to pick up, easy to drop off empties. So I I think it's a great option. I think something that, you know, things you have to look at, though, is, you know, the cost. You know, it is a rail move. How does that compare with, say, draying from Savannah? If you just dray straight from the port, they usually kind of price it somewhere below what a long range dray would mean. You know, what's the proximity to your receiving facility? Does it make sense to use it? And also just routing. You're gonna be restricted to just using routings that call Savannah, Georgia because it's a Savannah rail port. So, you can't connect to it out of Charleston. You can't connect to it out of Jacksonville. You have to use, the Savannah Port and the routings that go in there so you can run into those. You know, we talked about weather delays that you can see at Savannah. Congestion can be can be pretty high at Savannah. But once the the vessel does arrive and the container discharges, it is a very smooth operation.

Kyle Beaulieu

And,

Nathan Strang

Sorry.

Kyle Beaulieu

I'll take the next,

Nathan Strang

Kyle.

Kyle Beaulieu

I'll go I'll. take the next one. But before I go there, the only thing I'd add to what you had to share for for Gainesville, is because it is a new port, it will depend on which lane you're shipping on. Right? Are you shipping on TP, EV, TransLink, westbound, and then which carriers are best for for that. So, like, because of the size of Atlanta and the history of it, every carrier goes into Atlanta if they're going into Savannah pretty much, but that doesn't mean every carrier is going into Gainesville already. So, depending on your lane, and the carriers on that, it just because it's a newer port, it might be some time before it's, like, fully available on each on each option. Next, we have a a fuel question. So what can we expect of fuel surcharge in May and going forward for ocean freight, and which routes are, being more impacted? So fuel surcharges in general did go up for May. And in terms of which routes, pretty much every route globally. So the the amount, though, really varies depending on the lane. Probably best rule of thumb is if if it takes longer, it's costing a little bit more. So there has been some at least some TPEB differentiation in the market, between, like, a West Coast and East Coast fuel surcharge because it just takes longer, and uses up more fuel to to go to The US East Coast from Asia. And then the inbound or sorry. The headhaul trades like, TP, Biafari's westbound, TransLink westbound, those big trades, those those surcharges tend to be a little bit higher, than the than the reverse. So on those, smaller trades or export trades where there's just a less overall, shipments and bookings on, those fuel charges tend to be a little bit less. So, yeah, it's kind of a overall, perspective. But if you have any questions on specific trades, free to reach out to your flexible representative, and, those can be provided for you as well. Nathan, next question on LA rail.

Nathan Strang

Yeah. LA Long Beach Trail saw a question on seeing some delays out of there. I have not seen any widespread delays out of LA Long Beach. There is always a possibility of of of delays kind of on a on a situational basis. A lot of times we see delays if it's, you know, 20 foots. Those will tend to be delayed if they don't have a pair because they have to move in in pairs. 40 fives as well, they tend to delay on rail. But, overall, I have not seen, very large delays. If there's a more, you know, if there's more specificity with that question, reach us, reach out to us offline, and we can kinda dig into that further and see what may be causing some of the delays.

Kyle Beaulieu

Yeah. Maybe I'll we'll jump over to David, because I kinda cut him off before we could talk about fuel surcharge for air as well. David, to the our question on sort of fuel surcharges for May and going forward. Anything to. add there?

David Grinevald

Absolutely. So, you know, going back to what I I started saying when we were on that slide, it's hard to really decipher the airlines' behavior right now as we're seeing that some of them are increasing keep on increasing their fuel surcharges and and others starting to decrease it. What we are seeing though is that there is no rule of thumb as to how frequently airlines, determine their fuel surcharges. It's a bit erratic, and they do it whenever they decide to do so. So if the the movement that we've been seeing on the the a one jet fuel price continues the way that it has been over the past two weeks, meaning decreasing gradually, we should expect, fuel surcharge to keep on decreasing. But, again, the situation in The Middle East is so unstable, then any renewed hostility or even just fear of of that might reverse the current trend. But if I am going just by the what we're seeing in the market over the last two weeks, the trend should be going down.

Nathan Strang

Alright. Thank you. I'll take one on the Port Of Houston, and then I think Kyle wants to do his, one of our favorite topics. He's just talking about GRIs. But, yeah, Port Of Houston is congested. Can we ship via Savannah to Europe via rail? The answer is generally yes. This kinda goes back to the Gainesville question. Do not all carriers offer this service, but some do where you can rail out the East Coast, via, you know, Uni Pacific, to, I'm sorry, via CSX or Norfolk Southern or or, CPKCS. You can do that. Generally, from Houston, there's less availability. You'd usually go to Dallas and then move out of there to the East Coast. So there is added cost, of course. The rail costs, drain to a railhead, will will cause, some increase in costs there. I would also just look at just trucking to the East Coast in general and transload. Sometimes that can be cheaper than the rail. On an export, especially, the rail leg will be the most expensive portion of of the move, and sometimes you can find a cheaper trucking rate. So, I I have a couple clients that do this. They have Houston as an option, but then they also move out of Norfolk, or Savannah to Europe on export. So it is definitely something that can be done and definitely something that can be can be priced out. Alright, Kyle. Over to you.

Kyle Beaulieu

Yeah. So we had a couple questions about GRI likelihood. I touched briefly on it. So questions were around, likelihood of it for mid May, and, should expect them in the market, at least for the the big trades, for TPA being far east westbound. So as mentioned, capacity has tightened there, very much as a result of of some of the blanks that were in market for May, and then tightening, with of the supply demand balance. So, should expect those to to not only hit, but hold, for May, and then we'll see how the situation looks, as we get closer to to June, and if that, if demand actually upticks a little bit and leads to an early peak. I'm gonna Nathan, maybe we can tag team this one. So it's a question about peak, but also rail delays. So are there expected. delays out of Vancouver rail with increase in volume coming into peak? What I would say at least from a booking standpoint is, though capacity is tight for, the May, this is, you know, very much a a new situation. As a few weeks ago, things were pretty well balanced. It's really the blanks recently combined with the demand that has has led to an increase there. So at least as of this time, I wouldn't expect there to be a a big influence, on the situation of the Vancouver rail. We would probably take need a need a few more weeks of of heavy bookings before we'd like to some congestion there. Nathan anything destination side that you think would change that factor?

Nathan Strang

Yeah. No. I don't see anything on the destination side. We're through winter. Canadian rail's moving relatively smoothly right now. We haven't seen any disruptions. Vancouver is actually very fluid right now. Prince Rupert's struggling a little bit, with with cargo moving from there. They've seen some vessel bunching that throws their their rail operations off that can sometimes trickle down into Vancouver. But we haven't really seen anything there. So the PNW ports are are performing relatively well, and I don't think that we're gonna see because, you know, the crunch again, like like Kyle said, is a lot of it's doo doo, vessel blanks, and things like that. I don't think we're gonna see kind of that that surge that we did. And, also, they handled it pretty well last year. So if we're looking at, you know, as a year over year, Vancouver did pretty okay last year. When they did have congestion problems, it was due mostly to rail construction, or they had some, bridges go out and and some some mechanical disruptions that caused delays. But in general, they handled the volume pretty well. Let's see what's up next. Got a question on backlog out of Shanghai. So I covered this kind of in the map. Yeah. We are seeing a little bit of backlog out of Shanghai. It's about two to three days delay, right now on most services that are that are calling Shanghai Shanghai and Ningbo Ports. So, we are seeing a little bit of of vessel schedule slide out there, kind of due to accumulated delays, that stem going back all the way to, you know, fog and and maintenance closures.

Kyle Beaulieu

There's also a question around vessel delays, and whether there's updated timeline for transit, not just for processing time at ports. If you are a Flexport customer, if you go into your individual shipments, you can see, what those updated timelines might be for individual vessels. But also, maybe make a call out to, Atlas. So if you have specific strings, or vessels that you're looking at, you can go to Flexport Atlas, which is available to everyone and, get information on those there as well. So that'll show you kinda what the live, situation is.

Nathan Strang

Alright. We are at time. Thank you all for joining the, thank you all for joining the webinar. Thank you all for your questions. I saw I did see a question on recording. Yes. This is recorded. It'll be posted on flexport.com/webinars, usually by the end of the day, but definitely by tomorrow. You can also download the slides, in the docs. So all those links are in the docs. Thank you again, and we will see you next month.