Stable Prices In Advance Of CNY Shutdown

Freight Rate Update Wk6

By John Edmonds, Research & Marketing, Freightos

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

The week-long Chinese New Year holiday shutdown starts this week. Rates though have stabilized rather than rising – an indication that most shippers planned well and have already arranged their shipments, or are prepared to wait until after the shutdown.

Air Freight Pricing

There are fewer China-US carrier rates on Freightos WebCargo this week, pointing to more flights operating at capacity. That said, China-US air freight rates barely moved from last week, currently at $3.25-$5.00 (USD/kg). The only change since last week was a small 5c increase in average general rates.

China-Europe rates are currently $3.25-$5.00 (USD/kg), and haven’t changed since last week. Europe-US rates, which aren’t affected by CNY shutdown are also unchanged at $3.25-$5.00 (USD/kg).

Expect prices to fall slightly after CNY, but the biggest pricing change will be the upcoming return of promotions.

Manel Galindo, CEO Freightos WebCargo,

“Prices are now stable after months of volatility, and some outlandish express rate charges. Market rates shouldn’t move too much going forward, but expect promotions to return in April, as more European flights are scheduled and more of the larger planes return. One of the airlines I caught up with last week are already working their first promotions out.”

Ocean Freight Pricing

Like air rates, China-US ocean pricing is also unchanged this week. In a couple of week’s time, production and shipping in China will return to normal. Whereas air rates will drop a little, expect ocean rates from China to heavily fall away. That’s because, unlike air freight, ocean freight demand is well below capacity. And that’s why the mid-February GRI round was canceled, and also why China-Europe rates, which are not affected by GRIs, fell last week.

TRADE LANE THIS WEEK LAST WEEK WOW CHANGE YOY CHANGE CAPACITY
China-US West Coast  $1,412  $1,412 0% -31% Tight
China-US East Coast $2,719 $2,719 0% -23% Tight
China-Europe $1,625 $1,580 3% -20% Tight
China-Mediterranean $1,404 $1,413 -1% -18% Tight
Europe-US East Coast $1,420 $1,420 0% -6% Manageable
Europe-South America Atlantic $871 $882 -1% 9% Manageable
Europe-South America Pacific $1,551 $1,569 -1% 16% Manageable
FIGURE 1: FREIGHTOS INTERNATIONAL FREIGHT INDEXES (MAJOR LANES) WEEK ON WEEK AND YEAR ON YEAR
  • No movement on China-US routes this week.
  • Making year on year price comparisons are misleading currently for China lanes, because CNY fell out on January 29 last year.
  • Last year China-US rates fell strongly away soon after CNY, which fell out on January 29. This pattern should be repeated this year (refer Figure 2).
FIGURE 2: CHINA-US WEST COAST RATES TYPICALLY FALL AWAY AFTER THE CNY SHUTDOWN.

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