Prices Set To Ramp Up For Chinese New Year: Freight Rate Update W2
Weekly update article on the Freightos International Freight Index exploring rate trends and their driving forces.
2018 started with China-US ocean freight prices increasing by 27% as supply chains came back into full swing.
Following brief dips last week, ocean and air freight prices will likely rise in the run-up to the Chinese New Year closedown. Some forwarders reliant on the spot market are steeply increasing ocean pricing from China.
Zvi Schreiber, CEO of Freightos,
“Savvy shippers will be booking now to avoid the higher pricing as the Chinese New Year shutdown week looms. That said, ocean prices for shipping out of China are still well down on this time last year. China-US East Coast lags by 24%, China-US Europe by 29%, and China-US West Coast rates are a jaw-dropping 33% down on last year.”
Air Freight Pricing
Following disruptions caused by bad weather in US and Europe two weeks ago, last week airport operations quickly returned to normal, and cleared any cargo backlogs. There was one significant exception, at Fedex’s Memphis hub, where bad weather affected express parcels due for delivery on 12 January. There are currently no air freight capacity issues on any routes.
Manel Galindo, CEO of Freightos WebCargo,
“With airport operations back to normal, prices eased. Most China-US pricing was in the $6-7/kg band. At this point, I’d predict prices to jump to $10-12/kg as we get closer to Chinese New Year, with urgent shipments facing prices in the $10-$17 bracket.”
Ocean Freight Pricing
|TRADE LANE||THIS WEEK||LAST WEEK||WOW CHANGE||YOY CHANGE||CAPACITY|
|China-US West Coast||$1,362||$1,462||-7%||-33%||Manageable|
|China-US East Coast||$2,319||$2,369||-2%||-24%||Manageable|
|Europe-US East Coast||$1,420||$1,420||0%||-9%||Manageable|
|Europe-South America Atlantic||$852||$849||0%||7%||Manageable|
|Europe-South America Pacific||$1,453||$1,438||1%||2%||Manageable|
FIGURE 1: FREIGHTOS INTERNATIONAL FREIGHT INDEXES (MAJOR LANES) WEEK ON WEEK AND YEAR ON YEAR
- The lifts from the January 1 GRI (averaging $300 for China-US West Coast and $500 for China-US East Coast) eroded a little last week. Some ocean carriers are looking to capitalize on pre-CNY increasing demand with a January 15 GRI.
- Prices eased a little on the China-Europe’s lane, but in the run-up to CNY space is already tight.
- Prices stayed flat last week on the Europe-US East Coast lane. This is the only core lane where prices are less than 20% rates below last year’s rates.
FIGURE 2: ALTHOUGH CHINA-US WEST COAST PRICES HAVE RECENTLY RISEN, THEY ARE STILL WELL DOWN YOY.
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.