Chinese New Year Is On The Radar:

Freight Rate Update Wk 3

By John Edmonds, Research & Marketing, Freightos

Weekly update article on the Freightos International Freight Index exploring rate trends and their driving forces.

With a little over three weeks left before China shuts down for a week, demand for China export freight is ramping up. Capacity is getting tighter for ocean freight, especially for China-US East Coast, but still manageable. With shorter transit times, there’s more time yet for air freight, however demand has been running much closer to capacity on that mode. It was surprising, however, that air freight prices dropped substantially last week.

On the air freight side, there are clearly no capacity problems on the Europe-United States routes, with carriers resuming promotions last week. But the current capacity situation isn’t as clear for flights from China.

Manel Galindo, CEO of Freightos WebCargo:

“Air freight rates fell unexpectedly last week, and China-US pricing is now close to $3-$5/kg – typical non-peak pricing. However, prices are volatile and will likely rise again shortly. I’ve heard that carriers operating out of China are scheduling price increases this coming week.”

Ocean Freight Pricing

On the ocean freight side, Europe-US East Coast prices have bottomed out and haven’t moved for three weeks in a row. With ocean carriers staggering implementation of mid-month GRI’s, some will fare better than others in timing their Chinese New Year pricing. China-US West Coast pricing actually fell, while on the China-US East Coast lane, where capacity is tighter, pricing rose considerably.

Disregard year on year comparisons for the next three weeks, because prices this time of year are heavily influenced by when Chinese New Year falls out. Last year it fell out on January 29.

TRADE LANE THIS WEEK LAST WEEK WOW CHANGE YOY CHANGE CAPACITY
China-US West Coast  $1,312  $1,362 -4% -38% Manageable
China-US East Coast $2,719 $2,319 17% -21% Manageable
China-Europe $1,500 $1,540 -3% -28% Getting Tight
China-Mediterranean $1,363 $1,428 -5% -33% Manageable
Europe-US East Coast $1,420 $1,420 0% -8% Manageable
Europe-South America Atlantic $852 $852 0% 9% Manageable
Europe-South America Pacific $1,453 $1,453 0% 2% Manageable
FIGURE 1: FREIGHTOS INTERNATIONAL FREIGHT INDEXES (MAJOR LANES) WEEK ON WEEK AND YEAR ON YEAR
FIGURE 2: FREIGHTOS RATE INSIGHT PLATFORM SHOWS A GREATER SPREAD OF CARRIER PRICING FOR EAST COAST (RIGHT) THAN CHINA-US WEST COAST, REFLECTING THAT THE MID-MONTH GRIS HAVE BEEN STAGGERED

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