---
title: Decreasing Freight Rates & Improving Production Will Help Shippers Rebound
description: Proper supply chain planning and transition can help shippers recover from current setbacks, such as tariff wars, consistent blank sailings, record-breaking delays, increased pricing, and COVID-19.
---

[Trends | Articles by CAF Worldwide ](https://www.cafworldwide.com/blog)

# [Decreasing Freight Rates & Improving Production Will Help Shippers Rebound](https://www.cafworldwide.com/blog/decreasing-freight-rates-improving-production-will-help-shippers-rebound)

 Written by [CAF Worldwide](https://www.cafworldwide.com/blog/author/caf-worldwide) | Jul 16, 2020 7:28:04 PM

**By Torie Coleman, Director of Operations, CAF Worldwide

**

As shipping experienced a first-half 2020 economic downturn, the effects of the novel coronavirus (COVID-19) also deepened the industry’s mediocre trajectory.

While this *seems* daunting, there *is* a light at the end of the tunnel. Ocean and air freight rates are softening, China is rebounding, and demand is returning.  

****We outline current trends affecting this industry and discuss how freight forwarders can assist, below.****

### **Industry Changes**

*Skipped* or *blank* sailings have created an industry-wide lack of oceangoing cargo space. 

***There may be some relief in sight, however. 

*Blank Sailings vs. Total Sailings—Trade Overview—By Arrival Date*  
***

***Source: [American Shipper](https://www.freightwaves.com/news/fewer-trans-pacific-cuts-signal-3q-demand-on-the-mend)***

 

“Fewer trans-Pacific sailings will be ‘blanked’ (canceled) in the third quarter—potentially many fewer—as U.S. importers recuperate from the first COVID-19 wave quicker than expected,” [reports](https://www.freightwaves.com/news/fewer-trans-pacific-cuts-signal-3q-demand-on-the-mend)* American Shipper*. 

 

**Additional factors include:**

- Most carriers have already experienced at least one to two skipped sailing weeks per month.
- April through June were expected to incur 105 blank sailings. As of mid-June, third-quarter predictions are expected to be approximately 26.
- The entire industry has incurred COVID-19-related financial losses. This includes reduced capacity with increased onboard spot rates.
- Carriers will increase onboard tonnage as demand increases,

### **Pivoting Toward Personal Protective Equipment (PPE)**

During recent COVID-19-induced delays and shutdowns, many apparel manufacturers began producing PPE.

- Appropriate equipment and facilities have easily transitioned to mask, glove, and medical gown production. 
- PPE is essential and can be shipped from otherwise-shuttered countries of production.
- Most shipping contingency plans resulted from COVID-19 and its economic effects. 

### **Air Freight**

While still a costlier alternative to ocean freight, air freight is returning toward pre-COVID-19 rates. 

- Air cargo rates have decreased as North American and European regions begin to phase in reopenings. 
- These are improvements from late-March rates induced by more than 50 percent capacity cuts along Asia-Europe and trans-Pacific trade routes. 
- Little to no capacity is still forcing carriers to retrofit passenger plans for cargo. 
- Despite China-based PPE reductions, uncertainty still remains for general cargo and passenger fleet bouncebacks.
- It will reportedly take a minimum of five years to recover to pre-2019 levels. 

### **Third-Quarter Predictions**

If the aforementioned trends continue, certain sectors will recover quicker than others.

Other circumstances include:

- Chinese production is rebounding slowly and steadily from COVID-19.
- There are a greater number of alternative production nations, such as Vietnam, Bangladesh, Cambodia, and India.
- Carriers will watch for increased demand. They’ll adjust rates and capacity as they see fit to turn a profit.
- A second wave of COVID-19 will change the industry’s trajectory.  

**The preceding blog was excerpted in part from the CAF Quarterly Forecast. For additional insights, please complete the form below to download the full Q3 2020 edition.**

#### Download The Quarterly Forecast Now

### Issue 8: July 2020

Featuring Insights from Customs Brokerage Expert and CAF Worldwide CEO Joe Barry, Trade Lane Notes by Director of Operations Torie Coleman, Thought Leader Commentaries, Legal Insights, and more!

 

[View full post](https://www.cafworldwide.com/blog/decreasing-freight-rates-improving-production-will-help-shippers-rebound)

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