Name: European Freight Market Update: January 2026 Trends and Recommendations
Uploaded: 2026-02-10T18:27:49.707Z
Duration: 29 min 8 s
Description: European Freight Market Update: January 2026 Trends and Recommendations

Transcript for "European Freight Market Update: January 2026 Trends and Recommendations": Hello, everyone, and thank you for attending today's European freight market update. My name is Milena, and I'm the head of air freight for EMEA here at Flexport. Before we dive in, we will go over a few quick housekeeping notes to help everyone get oriented. On your screen, you will see a sidebar to the right of the main stage where you can submit your questions. At the end of the presentation, we will host a q and a, and we will try to answer a few audience questions. And normally, we try to answer as many as possible. So be sure to get your questions in early so that we have the time to to answer. In the same sidebar, you will see a tab that is labeled docs. This is where you can download a copy of today's slides. So before we start, we need to go through a brief legal note. We would like you to keep in mind that all the information provided in this session is based on the situation at this current time, and it may not be customized to your specific business requirements. We always recommend reaching excuse me. We always And you to reach out to a Flexport expert to discuss any particular situation that you may have. So the next I would just like to go through the agenda really quick. We will we normally, on this freight market update, share the latest updates on Europe's air and ocean markets. And we review key customs developments and provide recommendations to keep your freight moving. So as usual, I will stay here with you for a moment, and I will continue with the the latest of the air freight updates. So if we go to the slide thank you. We are now one month into 2026, and now we can be sure and confirm that the airfreight volumes have continued to grow in January. We have seen a change of plus 7% year over year, January on January. And while the numbers are real and clearly showing that the volumes are here to stay, there is one thing that we need to keep in mind, and that is that this year, the Lunar New Year starts almost at the February. So part of this growth is definitely given by the Lunar New Year's rush. I used a bit of a strong word here, definitely, and that is because in January 2026, the air freight industry recorded the first the very first drop in Chinese ecommerce volumes since 2022. So this can be an event that that could further reshape the the air freight industry, and, of course, this will be monitored by by the industry very closely. On the capacity side, we see that it continues to grow, but it's still slightly behind the demand. Now the the gap is is is closing since a couple of years, but but still we see a 7% increase in volume in January while the capacity is only plus five. So it's still a little bit of a unbalanced situation. On the rate levels, we see that at this very moment, the rates are generally decreasing, but it also varies very much from lane to lane. For example, export out of Asia is softening, which is normal due to Lunar New Year festivities. But the Transatlantic Westbound, which means our European exports towards North America, it has been very much under pressure since the beginning of the year. And that's also reflected on the rates, which are now close to 30% higher compared to the same time last year. So overall, the airfreight volumes continue to grow. If we follow the developments of airports and ground handlers worldwide, we see that most of them are making investments in new and additional facilities in order to accommodate increasing volumes in the coming years. So I would say despite the constant pressure from the geopolitical events, weather events, new regulations, the world today is so fast paced that it kind of makes air freight a necessity and a fundamental mode of transporting goods. We normally move to a couple of region specific updates. So if we can go to the next slide, please. Yes. So Asia to Europe, at this very moment, we don't see anything unusual. We are used to seeing an increase in demand follow followed by a rapid reduction in volumes during the weeks before Lunar New Year. And this comes together with a peak and a drop in rates across the countries in the region. So besides this, there are two things that are worth mentioning. One, I I already touched upon earlier, and that is that the ecommerce, in January, for the first time in the last four years, there has been a drop in Chinese export of ecommerce. And this very segment is a significant portion of the global air freight volume. It could also be during that this is due to the lunar New Year, but it can also mean that the e commerce players are reaching a better balance between their stock levels in countries where they sell and their urgent orders of items that are not yet in stock locally. It's, of course, very early to give any kind of prediction about this, especially since ecommerce players are always one step ahead of the game, and they are also constantly evolving, and they are constantly targeting different buyers. So it could be a case, but it also could be that we are going to witness something completely different in the way that they are working. The second thing that I wanted to mention is that the weather situation is, of course, more significant in Europe and in The USA, but we also had some storms in Korea and Taiwan where we had cancellations. And following two cancellations, of course, there are always backlogs. So it is cleared now, but there were a couple of weeks where Korea and Taiwan were a little bit difficult to to find space to to fly out. Rate levels on this lane, as I mentioned a little a bit earlier, are dropping. And at this very moment, the spot market is a very interesting playground for for the air freight industry. So this would be all on the Asian side. However, on the Europe to US, on the Transatlantic westbound lane especially, it has been a bit of a struggle lately. So the winter schedule was already tight this year because of the lower passenger demand. And on top of that, the weather also hasn't been really doing us any favors. First, we had snow in Frankfurt and Amsterdam, which caused delays and cancellations. And then the storm fern that hit The US East Coast starting from Texas and and and going up to to New York and and New York, there were hundreds of canceled flights. So it is worth mentioning that there is a significant backlog today, especially in Europe with The US pound cargo. And we do not expect this backlog to be cleared at least for the next two weeks. So what does this mean in practice? It means that the spot rates have increased on some airport to airport lanes by 24%, some other a little bit more. Of course, this is compared to the published rates and the market rates during this same period. Typically, this is a situation when general cargo gets deprioritized by airlines, and it gets delayed to leave space for express cargo, for perishables, and for life saving medicines. There is also, on the other side, a backlog of import cargo in The USA. In particular, Chicago is a is, I think, the most difficult airport to work with at the moment, followed by Newark and Philadelphia, where we have seen up to five days delays in releasing shipments for deliveries. So with difficulties finding space at origin and backlogs at destination, the transit time for these three destinations in particular can reach easily fourteen days, which is, of course, not what we want in air freight, but the situation is such that, of course, it's it's more of a deferred service kind of comparison. On the rate levels, today, the rate levels are way above €2 for standard service, and it can go even higher for urgent cargo depending on the exact airport bearing. In order to navigate this situation successfully, we recommend placing your bookings very early, if possible, with two weeks in advance. And we recommend this so your forwarder can have the possibility to meet your requirements, your transit time requirements, while the standard service is still an available option. If you arrive last minute, this will not be an option anymore. So the situation here is not easy. It will probably change in a couple of weeks. The good practice here is to as usual, when when when we give advice here is to keep a very, very close communication with your clients and with your freight forwarder. Because on one side, you can agree on a different delivery date and delivery terms. And with your forwarder, you can always find the rights the right service that can meet those needs. We can pass now on airfreight recommendations. So I have added basically four things that that I would like to talk to you about. The first one is we advise to build a at least seventy two hour weather capacity buffer. Because in winter, we cannot really plan for perfect timing even though we are talking about air freight, and it's a very rely reliable mode of transport. But when these kind of things happen, we really need to have a buffer, which can help us maintain the promises with with our clients. On top of these buffers, especially on the Transatlantic lanes, so our export into USA, we also advise to start looking at secondary US gateways. So if it's not if it is possible to bypass Chicago, for instance, you can avoid one of the worst congestions, and you can still keep your timelines realistic. The second thing is timing. Now is it is the right time of the year for you to secure your q one capacity. Why is it now? It's because March always brings a small peak, and securing capacity now can eliminate the headache of looking for the space last minute, especially for the quarter end. So the fixed allocations in this case are the key. Then we have the third one, which is choose your services wisely. We know that air freight is always the the most expensive way of transport, and it can be tempting to to just look at the lowest rate and choose for the lowest rate service. But in this environment, as I explained earlier, this kind of choices can be a bit risky. So the winning formula here for air freight is a balance between price, service reliability, and capacity guarantees. Because only with these three, you can actually eliminate the the problems of having a longer transit time and having to explain of what is happening. And in some cases, also, you can avoid giving discounts to your clients because you have not delivered on time because these are actually things that shippers and most of them, most of freight forwarders cannot really control. The last recommendation that I have for you today is lean on the data. We are reminded every day that global trade is unpredictable. But while we can't predict the next storm, there are still some patterns that we can find in the data and that actually allow us to plan. So use your intelligence to make the decisions rather than just reacting on the latest disruption. So for now, this will be all from me. Jannik, I would invite you to share some portion updates for us. Thank you, Milena. Welcome, everybody. My name is Jannik, and I'm going to guide you to the ocean freight part of today's presentation. Let's kick it off with the latest updates on the FIAs Westpark market market. The SCFI decreased last Friday by only 15 US dollar. We need to see say after the decrease that we had the weeks before, that stands a week seven SCFI of 1,403 US dollar. That's an overall decrease before Lunar New Year of 316 US dollar per TEU. As you can see on the graph on the left side, of course, the height of the of the index is different between the last years, but at least there's some sort of a pattern that that can be seen. Yeah. In terms of lunar New Year, also an ocean freight that has an heavy impact, first of all, and this is also what is what is seen the most are the blank sailings. Blank sailings in the weeks seven to nine have summed up to 20 in total. And in in week nine, for example, we will see 42% of capacity on FaizoResponse missing. That's an estimate of more than 140,000 TEU to put it into numbers. And last but not least, as of, of course, mentioned already, Lunar New Year is going to start next week, and we'll shut down most of the suppliers and facilities in Asia, which will also cause one week of no SCFI being published. So that also needs to be taken into consideration. Let's switch to the next slide, and let's give you some update on on the. Last week, the Gemini Corporation, which combines the German habergloid and the Danish Maersklites, announced that they're going to route their m e 11 or IMX service, how it's called at Habog, that they are going to route it through sewers beginning of mid February. The service, as you can see on the right, is a service that connects India or The Middle East and the MET. This time, we have a service that is not going to the East MET, but it's going to the West MET. That's one of the of the difference here. Both carriers stated that all vessels that will basically transit the Suez Canal will route it under naval escort. Additionally, there was a note released that depending on on how the transit actually works out, there might be two more services connecting this time China with EastMed that could also potentially transit through Suez depending on on how the m 11 iMX service is basically operating from February onwards. With the recent news, on the next slide, we were basically preparing some scenarios for you that could potentially happen with with an opening of the sewers. Although we need to mention that the sewers itself never was closed. It was just not transited through due to security reasons. We, of course, need to mention that the estimated probability here can change based on geopolitical tensions or whatsoever. Overall, we have we have three different scenarios that could commonplace. Option one would basically be that the sewers stays closed for ocean container shipping. So basically, the status quo that we right now see will remain as it is. As you can see, downwards on on option one, freight costs would decline or be rather stable depending on seasonality. But of course, in terms of of on time delivery and schedule reliability, we will not see any any further increases. Option two would be a partial return through the sewers. That would mean as exactly as we see it with Gemini, that you see certain services or certain alliances shifting certain services through sewers again. In terms of of operational bottlenecks, of course, that would increase if you see services arriving in North Europe or in South Europe at the same time. But overall, an operational chaos would rather be not the case. That would slightly change if we check on option three. The bandwagon effect basically means that the first carrier alliance starts to transit through sewers, and everyone else would follow. That would cause massive operational issues both in North Europe and in South Europe. And before the additional capacity would actually cause a reduction in freight costs, we will most likely see an increase due to missing equipment in Asia, due to congestion and and very long lead times in North Europe and South Europe. Yeah. That would be on the Suez opening. Let's go to North America and check on the latest updates there. The Transatlantic rate levels have been stable throughout the last couple of weeks. The demand, although, started pretty moderate into February, and it forces shipper and freight forwarding companies to book early, especially when you are shipping from The Mediterranean to to North America. The TPEB rates, Asia to The US East Coast and West Coast, have been decreasing the last four weeks. The graph on the right side is showcasing a bit the transported container volumes throughout the last couple of years. 0% of the baseline can basically seen a start date in 2019, so pre COVID. It shows the volumes until 2025. With that being said, you can see that the global TEU increased by 13% since 2019. The graph in the middle shows that North America volumes have only grown by 7.6% pre COVID. So not only related to all the tariff situation that we were facing last year. So if you compare the rest of the world with North America, then rest of the world, at the same time, was increasing almost twice as high as North America. Let's go on to the ocean freight recommendations. In order to maximize the departures and to make sure that all goods depart pre Lunar New Year, make sure that that your lots and your bookings are as small as somehow possible. Although increasing your destination charges, it will make sure that or it at least gives a higher chance that the goods departs in time. With Lunar New Year approaching, as already said, a couple of basically ship and supplier will will go on their well deserved vacations. So make sure that all paperwork is is basically sent out. And also make sure that you could already plan for the first bookings that should depart in early March when everyone in Asia basically returns. What we always mention in in Ocean over the last couple of months is the different quality in in Ocean service levels. We continue to see a range of transit times on the certain services. So make sure that you clearly communicate what is important for you and give the freight forwarder a chance to to steer on the fastest or, let's say, slower transit times. Before I now hand it over to customs, we would ask you a question. We did ask pretty much the same question last year. With all the information that you have received and with everything that you've heard so far, have you made up your mind when the routing of of ocean container vessel would actually continue to the sewers again. Is there anything that you that you think might happen or could happen? You have four different possibilities to basically vote, and you can, of course, also vote that that this year there will be no change. I see the first votes coming. So March pretty much unlikely, at least on on the votes that we see here. And, yeah, we see more than 50% voting on late twenty twenty six. But also, some of you are not really seeing the transit through sewers in in 2025. Sorry. 2026. Thanks a lot for participation. And with that, I would hand it over to Jamie for customs. Thanks, Jannik. And last but not least, a quick update from customs. So if we go to the the first slide, just a little bit of a spotlight on duty drawback in The US. I suppose for many of you, you know what this this is, but for those that don't know, essentially, it's a way of claiming back duty on imports in about a five year window. It's based on whether certain conditions are met, but, essentially, what it allows you to do as a business is claim back import duty that was paid on goods depending on certain circumstances. Those certain circumstances are listed here in the types of drawback possibilities. They kind of do exactly what they say on the tin. So, for example, if some of the products were used in manufacturing process and re exported or if they were unused and re exported back, you know, that's typical of, you know, seeing if your product will sell on the market, maybe it doesn't, and you you export it back out. Or it's rejected merchandise, either rejected due to not being in line with a contract of sale or, you know, the goods being rejected by, for example, partner government agency. These are all different mechanisms you can use. If you're familiar with types of EU special procedures, if you know the terminology inward processing, outward processing, return goods relief, or rejected imports, see, duty drawback in The US as as as that on steroids is basically how I like to explain it. And just just an instant plug at the end, if you are looking at making a claim or it's maybe your first time, please feel free to reach out to us. Or if you've already started to go down the process of making a claim, we have our own proprietary software here at Flexport that can maximize the amount that you might get back. So really important that you check with multiple providers to maximize that claim. Now, we go into the fun stuff, a general customs update for EMEA customs. So, first, I would like start with the EUDR. So for everyone that doesn't know, the EU's deforestation regulation supposed to go into an effect in December 2025, but now has been delayed twelve months for your enterprise and medium sized businesses and to twenty twenty seven for your small businesses. During that period, it's kind of you know, it's important, and, you know, we're mentioning this to every company that we work with, but please make sure to use this time to prepare. It is an extension for a reason. We've seen this now extended, I believe, twice. We really do feel like this, you know, is the third and final. So, really important you're preparing, using this time to simulate, what, a start date might look like. Go through those simulations in your business. Make sure you have the right data from your suppliers, and make sure you understand the DDS statement requirement. Essentially, you have to submit these, prior to arrival and provide certain references to your broker. There is a way of doing it on a yearly statement as well. We recommend, depending on your type of business, to look into this. This could actually cause your goods to be held at the border. So really, really important to make sure you're on top of that. Another update is we just had a provisional anti dumping case, which has been going on for the last few years for ceramic products from Republic Of China go into effect. So, essentially, now it's been switched to definitive anti dumping, meaning that regardless of the supplier, if the goods are of Chinese origin, usually under chapter 69, they will be subject to a definitive antidumping duty. It's actually a little typo there, but 79% of of a duty rate that will apply on those goods. Really important if you have goods, ceramic products, especially of chapter 69, you're looking into this because it's going affect a lot of your imports from the February 7 over past weekend. So those are the updates from customs. Thanks, Jannik. Thank you, Jamie. So we have arrived to almost the end. And since we we haven't received any questions so far, we we like to think that we were clear. If that is not the case, please reach out to us, and we will be happy to to to answer any questions or or get on a call to to dive deep into a a subject. And with with this beautiful image, I would like to close today's session. And thank you all for for joining here, for for joining our market update. And we would like to take a moment to wish everyone celebrating a very happy and prosperous year of the course. Thanks again.