Rates continue to drop – especially on Asia-US West Coast lanes

Weekly highlights

Hurricane Ian closed airports across the southeast, disrupted rail movements, and temporarily closed container ports in Jacksonville and Charleston. Other ports already struggling with delays like Savannah, remained operational.

Easing port congestion both in China’s hubs and at LA/Long Beach is increasing available capacity. Vessels leaving Asia for the West Coast are reportedly only about 70-80% full. The continuing decrease in demand is pushing rates down quickly on this lane.

Asia to US West Coast prices fell 16% to $2,516/FEU this week.  This rate is still 88% higher than in October 2019, but is just 5% higher than in October 2018.

Asia to the US East Coast and to North Europe rates each dipped 5% since last week.

Falling rates, especially on the Asia – US West Coast lane, could soon push prices below the break even point per container for some ocean carriers as costs have also climbed with inflation. 

• Smaller carriers who currently operate about a third of transpacific capacity may be the most exposed to falling prices making operations unprofitable. 
• Larger carriers are likely hoping that smaller players and their capacity will be pushed out of the market, and together with blanked sailings and canceled services, rates will stabilize.   

Slowing demand for goods out of China in September also meant falling air cargo rates, according to the Freightos Air Index.

• Transpacific prices decreased 32% since last month to $5.12/kg – half the level of a year ago.
• China – Europe rates fell 19% to $4.13/kg, 43% lower than last year.
• Transatlantic rates were stable, but are 25% lower than a year ago as passenger capacity on the lane has increased. 

Peak season for air cargo typically begins around late October, but some in the industry are doubtful there will be much of a surge this year.

Asia-US rates for this week

• Asia-US West Coast prices (FBX01 Daily) decreased 16% to $2,516/FEU. This rate is 85% lower than the same time last year.
• Asia-US East Coast prices (FBX03 Daily) dipped 5% to $6,634/FEU, and are 66% lower than rates for this week last year.

Check in next week for more real-time freight market updates to help you ship smoother.

Check in next week for more real-time freight market updates to help you ship smoother.

More rates from Freightos.com

Containerized Freight Rates from the Freightos Baltic Index