Carriers May Have Something To Be Thankful For This Thanksgiving

Freight Rate Update Wk 46

By John Edmonds, Research & Marketing, Freightos

Freight Rates Are Down, But Carriers Have Something To Be Thankful For.

The annual peak season rush typically sees spiking freight rates well into November.

The rush is still there this year. Shipments are up on last year with delays expected in US ports this week. Customs are operating at max capacity and anything arriving on Wednesday will not get out until next week.

And rates did hit a GRI spike in early November. But carriers were probably hoping for rates to stick more than they did, given rates are 30% down on this time last year. However, China-US West Coast 40’ rates are already back where they started in late October, before the GRIs. In other words, rate movement simply followed the mid-month GRI rate erosion pattern Freightos recently quantified.

While rates are down, it still looks like carriers will be giving thanks, as it is looking likely that the FMC will scrap carrier filing requirements. For carriers, this measure would cut through red tape. And if carriers no longer have to give 30 days notice before increasing prices, this will arguably free up market forces.

In the short run, of course, rates won’t be affected. Despite demand being up on last year, the market is still in a period of chronic oversupply.

Core Lane Pricing:

TRADE LANETHIS WEEKLAST WEEKWOW CHANGEYOY CHANGECAPACITY

China-US West Coast $1,312 $1,437 -9% -31% Space is available
China-US East Coast $1,869 $1,969 -5% -29% Space is available
China-Europe $1,557 $1,557 0% -13% Space is tight
China-Mediterranean $1,343 $1,300 3% 2% Space is available
Europe-US East Coast $1,434 $1,485 -3% -14% Space is available
Europe-Sth America Atlantic $785 $1,088 -28% -29% Space is available
Europe-Sth America Pacific $1,608 $1,610 0% 25% Space is available
FIGURE 1: FREIGHTOS INTERNATIONAL FREIGHT INDEXES (MAJOR LANES) WEEK ON WEEK AND YEAR ON YEAR

Key Points By Lane

  • Despite being well into peak season, China-US West Coast rates dropped 9% this week, and now lag a massive 31% behind rates this time last year. In fact, rates have lagged behind 2016’s since early September (see below).
  • Similarly, China-US East Coast rates dropped (5%) this week and are lagging (29%) behind last year’s rates.
  • Even though space is tighter on the China-Europe than other lanes, the planned mid-month GRI didn’t materialize. Overall, rates are unchanged from last week.
  • Europe-US East Coast rates dropped 3% this week and are 14% behind where they were this time last year.
Peak Season Surcharge US West Coast index
FIGURE 2: CHINA- US WEST COAST RATES HAVE BEEN LAGGING BEHIND LAST YEAR’S RATES SINCE EARLY SEPTEMBER

About The Freightos International Freight Index

Unlike other freight indexes, the Freightos International Freight Index (FIFI) uses aggregated and anonymized real-time business data from global carriers, forwarders and shippers on the Freightos AcceleRate freight rate management platform. That’s why we believe these indexes to be the most accurate and real-time representation of market rates available. What’s more, it’s offered for free.

Access freight rate insights from 500+ million price points.

For free.

SEE THE FREIGHTOS INDEX