In this week's episode, Adam Kord, Senior Vice President of Global Ocean, discusses the growing imbalance between supply and demand in the global ocean freight market.

He shares insights on vessel congestion across Asia, rising ocean freight rates, the impact of Golden Week, and what shippers can expect as capacity constraints and supply chain disruptions continue through the coming months.

  • 12 min

Current Position | Weekly Briefing September 16th - September 22nd

The Expeditors Podcast

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You're listening to Current Position, a weekly briefing from Expeditors mapping the shifts across trade compliance, regulatory changes, and global supply chains, plus some market insights from our Senior Vice President of Global Ocean, Adam Kord.

I'm Chris Parker, and here's the latest from September 16th to September 22nd. 

Global Customs & Trade Market

Visibility into steel “melt and pour” origins will become a customs requirement in the European Union on October 1. As of that date, EU importers of covered steel must declare the country where the steel was melted and poured on the customs entry. Evidence can be provided via a Mill Test Certificate showing that country and the heat number. The new requirement will allow for a one-year transition to allow alternative documents as backup. 

Canada trade talks with the Philippines and ASEAN keep moving closer to completion. Canada’s Trade Minister said the aim is to finalize both agreements by November with the goal of diversifying trade. Canada sees future potential in trade of Canadian LNG for companies trying to move away from reliance on other sources and potential increase in movement of goods from data-center sectors like the Philippines. 

Global Ocean Market

Even as security concerns continue to persist, container lines are accelerating their return to routes along the Suez Canal. The OOCL Portugal transited Suez on Sept. 16 in what is said to be COSCO’s first southbound passage since the Red Sea crisis began. Other carrier alliances such as Gemini are also moving services back through the canal. Container-ship net tonnage through the canal rose 54.2% year over year in the first eight months of 2026, despite continued Houthi threats in the area. 

Trans-Pacific spot rates are closing in on 80-90% of pandemic-era records. Far East–US East Coast rates reached over $11k per FEU and are the closest to the highest rates seen during the pandemic.  West Coast rates are just under $8k, about 18% below their all-time highs, according to Xeneta. Carriers are adding East Coast capacity to capture the surge, while rising bunker costs could push fuel surcharges and rates higher still before an eventual expected softening. 

Brussels is tightening scrutiny of foreign investment in EU ports and other infrastructure. A study of 123 European ports from 1997 to 2023 linked Chinese investment to higher container volumes, most clearly at Piraeus, Antwerp, Rotterdam, Barcelona and Le Havre. Under new European Union foreign-investment screening rules, greater weight must be given to infrastructure and operational security with less dependence on operators based outside the Union.  

Global Air Market

Asia Pacific air cargo strengthened in mid-September, pushing global rates even higher. Chargeable weight from Asia Pacific was up 4% in week 37, according to WorldACD data. Spot rates, meanwhile, were up another 3% to an average of $4.69 per kilo. This was the third straight weekly rise for air from the Asia Pacific region. Worldwide average rates increased by 2% overall.  

The air cargo market received a reprieve from U.S. regulators in terms of management of wide body freighters. The FAA will allow Boeing to build its 777 freighter beyond a January 2028 emissions-compliance deadline that would have stopped its production. The waiver of the deadline matters because freighters carry 60% of air cargo, and airlines are already working with aging-fleets, fewer widebody passenger deliveries, and demand from the AI boom among other demand surges globally.  

Global Ground Transport Market

Record-low water levels on the Rhine continue to choke barge traffic and force freight onto Europe’s roads and rails. The river’s shallowest middle section has fallen about 16 centimetres below the low-water mark. This has halted most voyages through Switzerland and southern Germany. One barge can replace roughly 200 trucks, so shippers are not only facing longer transit times and scarce capacity, but also higher rates.  

Bottlenecks at Spain’s ports could cost hauliers big in terms of wasted time. Some experts are estimating that cutting truck waiting times at Spanish port gates could be worth more than €400 million a year. Spain trucker drivers or hauliers move more than 550 million tonnes of freight annually. The report finds congestion is shifting beyond the port to road and rail approaches and inland terminals in Algeciras, Valencia and Barcelona. 

Up next, Senior Vice President of Global Ocean, Adam Kord. 

The following discussion could include forward-looking statements. Of course, actual results may differ materially because of various risks and uncertainties. We are not obligated to update these statements, and we rarely do so. Instead, we refer you to our most recent SEC filings for more information about the risk factors that could affect our future results. 

Chris Parker: Adam Kord, I... we gotta stop meeting like this. How are you this week?

Adam Kord: I'm doing very well, Chris. Always good to talk to you.

Chris Parker: What has been on your mind?

Adam Kord: Well,I guess, um, on my mind has been microeconomics, uh, supply and demand, and the imbalance between the two, what we're experiencing right now in terms of global ocean shipping and what it's doing with rates, what it's doing with accessibility, and it's pretty messy out there right now, uh, especially with exports, uh, coming out of Asia.

Chris Parker: And we had you just a few weeks ago here. Uh, what has changed since then?

Adam Kord: Yeah, a few weeks ago when I' was on, uh, I was talking about the weather. I was talking about typhoons. We had just had our third typhoon, uh, Typhoon Saudel, um, that had, you know, affected shipping, and I'd predicted that vessels were gonna start stacking up, and gonna cause some challenges with supply and demand, and that has absolutely happened.

Um, vessels have, have stacked up considerably, making it very difficult to load or unload any cargo. Um, as of last week, there were 260 vessels waiting to be unloaded or waiting to be loaded, so that was about 2.5 million TEUs or twenty equivalent container positions worth of cargo that were stranded, the the shipping community cannot access.

Chris Parker: Okay, so 2.5 million TEUs, that, uh, that sounds like a lot, uh, to say the least. Could you put that into perspective here? Like, how can I visualize that, that much capacity?

Adam Kord: Yeah, to put it in perspective, um, you know, the, the global carrier community have, have shrank over the years due to mergers and acquisitions. The fifth largest carrier in the world, global carrier, is Hapag-Lloyd. Um, and they have about 2.3 million TEUs of capacity in their entire fleet. So the amount of cargo that is currently inactive, waiting to be loaded or unloaded, uh, out of East Asia, is bigger than Hapag-Lloyd's entire fleet. So if you could imagine what would've happened overnight if all of Hapag's ships were removed, and that's what we're experiencing right now, or the market's experiencing right now in Asia.

So for that reason, it's not that demand is rapidly increasing, or demand has really taken off, just demand remains consistent, up a few points, and there's just not the ships available to put cargo on, which is causing market rates to go, to go high. They continually, uh, escalate week after week, and we're seeing rates that are approaching, you know, COVID or pandemic levels when demand was far exceeding available capacity. That coupled with, you know, we talked a few podcasts ago about the, the conflict as well.

Fuel prices are high, so the combination of there just not being enough available capacity coupled with high fuel prices has really escalated the amount that, that Expeditors and, and, and our customers and the overall market are paying for ocean freight.

Chris Parker: You kept mentioning loading onto vessels. What about the unloading of those vessels? Is that... I mean, what, what do you think is happening to all the freight that's out there right now on the water?

Adam Kord: You know, we, we, we, you know, right now we're doing this podcast, you and I are sitting in the USA, and, uh, you know, we, we import in the US a lot, much more than we export. And we talk about, you know, the, the largest exporting country in the world is China, but the second largest importing country in the world is also China.

So just as, you know, we're paying a lot of attention to, you know, those goods that are being manufactured and going to Europe and Latin America and to the US, um, um, but also there is a lot of goods that are being unloaded into China as they're the second largest importing market.

Chris Parker: And as I understand it, we have something called Golden Week coming up here too. Um, what could that look like?

Adam Kord: Well, Golden Week is, um, one way you can look at it, it's a, it's a week-long holiday affecting most of, most of, uh, East Asia, especially China. In China, most businesses are gonna be closed down, including factories, from October 1st. to the 7th.

So when that happens, leading up to that shutdown, uh, factories and manufacturers and exporters are pushing as much cargo as they can out. So it get, the market tends to get a, a little bit busy, and then the market slows down rapidly during that week because everything's closed. So now this is kind of the, uh, I don't wanna get back to weather but again, perfect storm. Right?

Um, vessels stacking up, folks trying to push out as much cargo as they can prior to Golden Week, uh, prior to the market being, falling off, but they can't access vessel capacity because there's so many vessels that are sitting, waiting.

Chris Parker: Right. And then after Golden Week, I mean, is this gonna be more of the same, or what?

Adam Kord: Yeah, after Golden Week, I was originally expecting that the market to really fall off, but I'm predicting that the backlog is so huge right now, it's gonna take many weeks after Golden Week for the markets to stabilize.

And in, in addition to that, you know, uh, I've talked about blank sailings in the past. Blank sailing is when vessels port skip in order to remove capacity from the market. A lot of times it's, it's, it's a mechanism used by the carriers to control supply and demand. In this case, um, there are 78 scheduled blank sailings between Golden Week, uh, roughly week 40 to week 43, and a lot of those are just to catch those vessels back up in rotation.

So that's also removing, you know, in a sense, removing additional capacity, but that, that capacity is, is skipping, uh, ports of entry. So the long and short of it, Chris, is unfortunately the markets are gonna be strained, and it looks like they're gonna be strained throughout most of the month of October, still probably even spill into November. So supply and demand will be out of balance.

Chris Parker: So then for shippers out there, what do you see as something that they have control over right now?

Adam Kord: Yeah, well, you know, they, they have control over what they're manufacturing. Uh, unfortunately they don't have control over, uh, fully, of, of access to ships. So, uh, rates are really high right now.

Um, if, if it's possible, if exporters, uh, can wait a little bit, if they can delay some of those orders until November, um, I'm predicting, I'm, I'm wrong all the time, but I'm right a lot of the time as well, is that the market should loosen up come times of November. So it'll be much easier to get access to vessels, and rates should fall accordingly.

Uh, so if you don't have to ship right now, and you can delay some of those purchase orders, uh, absolutely do it, and you're gonna save on cost, and you're gonna have much better, uh, access to capacity as, as the year goes on.

Chris Parker: Sounds like a wild time, Adam.

Adam Kord: Wild time indeed.

Chris Parker: Yeah. All right, cool. Well, thanks for the insight. Appreciate it.

Adam Kord: All right. Thanks, Chris. Until next time.  

You are now at our current position. Links to everything we covered today, plus some extra articles of interest, are in the show notes.

And while you're there, check out the events and webinars we flagged for the weeks ahead. Thank you for listening, and we'll see you next week.

Be sure to subscribe to your preferred podcast platform so you don't miss future episodes. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and X, or simply visit us at expeditors.com. Take care, and I'll see you next time!