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UPS Supply Chain Solutions®

2023 Quarterly Global Freight Industry Trends

Global Macroeconomic Trends

The easing of pandemic-related restrictions and a revival in service sectors is a key support to growth

Key Macroeconomic Indicators Summary

Table showing the year over year growth as a percentage since 2021 and forecasting through 2024.

Key Macroeconomic Indicators Summary and Projection

Line graph showing Real GDP, Real Exports, Industrial Production and Retail Sales, which are forecasted to be down in 2023 and rebound in 2024.

Real GDP Quarterly Growth

Bar chart showing Real GDP quarterly growth as a percentage. Full year 2023 is expected to be on average 1.64%.
  1. World GDP continues to be updated downwards due to worsening macro conditions
  2. Real exports growth is still soft. Only the US saw a slight rebound, other major economies maintained the downward trend

Global purchasing power continues to slide affected in part by above average inflation

Purchasing Managers' Index line graph showing the declining PMI results from 2022 in US, Europe, China and Global perspectives.
  1. Global manufacturing Purchasing Managers' Index (PMI) – fell to a 30-month low of 48.6 in December, signaling a further deterioration to the industrial production sector
  2. China's manufacturing sector remains below the neutral benchmark of 50.0 points
Line graph showing the inflation rates from the US, Europe, China and Global perspectives quarterly from 2022 through 2024. Forecasted to drop across all regions throughout 2023 and 2024.
  1. The global annual inflation rate is expected to drop from 7.65 in 2022 to 5.12 in 2023
  2. Inflation rates are easing down globally and regionally which points at easing prices
  3. US inflation rate is expected to ease down to 4 points in 2023

2023 GDP Outlook

While recent 2023 GDP forecasts have increased slightly compared to October 2022 estimates, they remain below historic long-term GDP growth figures. Strongest growth expected in APAC, attributed mainly to recovery in China.

2023 Real GDP Forecast YoY(%)

Bar chart showing 2023 Real GDP forecast as a year over year percentage for the US, European Union, UK, Germany, Asia-Pacific, China and World markets.
  1. The macro economic outlook points to a slowdown in growth in 2023
  2. GDP growth is forecasted to ease in most countries and regions (compared to 2022), with the main exception of China, where GDP is expected to recover
  3. 1H23 will see evolving GDP growth, but will gradually improve going into 2H23
  4. Mainland China economic downturn is expected to moderate as a result of improving manufacturing conditions
  5. Higher energy costs could push Western Europe into recession
  6. The IMF expects inflation and world oil prices to moderate over 2023, offering some respite to both consumers and the air transport industry

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Air Freight Market Update

Air cargo market continues to be challenged by macroeconomic and geo-political pressures
Line graph showing the air freight demand and capacity from 2019 through the end of 2023.
  1. Despite an earlier forecast of 4.0% growth, Seabury projects final 2022 air cargo volume finished 8% below 2021 level
  2. Air cargo volume growth is forecast to be -4.1% in 2023 year-over-year.
  3. The weaker air cargo demand is a result of multiple headwinds. Inflationary pressures, the ongoing war in Ukraine and the unusual strength of the US dollar makes commodities traded in US dollar more expensive in local currency terms
Bar chart showing the air freight market rates as a year over year percentage since October 2021 through the end of 2022.
  1. Air cargo rates have been easing down since September, but they remain above 2019 levels
  2. The soft demand and high inventory levels continue to drive the rates down, ahead of an expected muted peak season

Air Freight Industry Trends

The air freight market has begun to stabilize but issues remain & shippers should consider diversification options

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Ocean Freight Market Update

Recessionary concerns decrease global demand, carriers reduce capacity to prevent further decrease to rates
Line graph showing the ocean freight market demand for the TransPacific trade lane, TransAtlantic trade lane, Asia to European Union trade lane and the Global average from 2019 through the end of 2023.
  1. US consumer demand continues to decline quarter-over-quarter
  2. Sufficient inventory for many shippers combined with economic pressures weakens demand
Line graph showing the ocean freight capacity for the TransPacific trade lane, TransAtlantic trade lane, Asia to European Union trade lane and the Global average from 2019 through the end of 2022.
  1. 2022 global capacity downgraded compared to Q3 forecast
  2. 2023 will see record new ships enter the global fleet, but net capacity offset by IMO23 & rampant Blank Sailings
Line graph showing the ocean freight rates for China- East Coast, China- West Coast, Asia to European Union, and the WCI composite index the second half of 2022.
  1. Rates continue to drop
  2. 4Q22 Drewry forecasts -61.7% Global FEU Rate year-over-year 22/23 (-37.3% 3Q22); -66.9% for East-West Trade (-34.6% 3Q22)

Ocean Freight Industry Trends

Blank sailings continue to impact the market, particularly coming out of APAC
This document is for informational purposes only. It does not constitute legal advice. Information herein was obtained from government, industry, and other public sources. It has not been independently verified by UPS and is subject to change. Recipient has sole responsibility for determining the usability of any information provided herein. Before recipient acts on the information, recipient should seek professional advice regarding its applicability to the recipient's specific circumstances.

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