Expeditors International, in a new signal of a weakening demand in the global economy, says declines in ocean and air freight volume accelerated in January as a growing spot pricing market expanded around the shipping world.
In a securities filing responding to written questions, Seattle-based Expeditors said its air freight tonnage plunged 32 percent in January compared to the same month last year, sharply ahead of the 24 percent drop Expeditors saw in air shipping in December.
Ocean freight container volume was somewhat better, falling 18 percent in January after a 13 percent year-over-year decline in December.
The $5.6 billion company is one of the world’s largest freight forwarders and its view of the market provides a new window into the steep falloff in shipping demand at the start of 2009 and the way freight capacity buyers and cargo carriers are coping with the decline.
Expeditors said an “erratic spot market” in pricing boosted air freight gross yields for the company “by a small amount” in January. “In an attempt to keep pricing fresh, we are adjusting rates frequently to reflect movements in market (costs) which are both sustainable and are not short-term spot rates,” the company said.
Although ocean shipping is also seeing a strong spot market, Expeditors said, the swings have not been as large.
“There also appears to be more capacity taken out of the ocean freight markets” than from air freight lanes, the company said.