All Quiet On The Eastern Front

Freight Rate Update Wk7

By John Edmonds, Research & Marketing, Freightos

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

Coming out from the Chinese New Year holiday shutdown, with international freight movements from China at a standstill, air and ocean pricing from China barely moved last week. It’s been quiet on other ocean lanes and air routes as well.

Air Freight Pricing

There are no new China-US rates on Freightos WebCargo this week. Average general to average express rates stay at $3.25-$5.00 (USD/kg).

Similarly, there are no new China-Europe rates on Freightos WebCargo this week. The average general to average express rates also stay at $3.25-$5.00 (USD/kg).

Coincidentally, there was very little movement with Europe-US pricing, which remains at $3.25-$5.00 (USD/kg).

Manel Galindo, CEO Freightos WebCargo,

“Air freight prices are currently holding steady, which is a big change from recent months. There are still very few promotions in the market – and none from Europe to the US. This will change in April, with the larger planes returning to European flights, and more flights scheduled.”

Ocean Freight Pricing

Rates from China barely changed this week, the largest movement being 6% for China-Europe. Next week, production and shipping in China will start returning to normal. Soon after, expect ocean rates to drop, much more significantly than with air rates. That’s because off-peak demand is much less than off-peak supply with ocean freight than it is with air freight. Although ocean carriers announced a March 1 GRI, expect it to have little or no impact on prices next month.

TRADE LANE THIS WEEK LAST WEEK WOW CHANGE YOY CHANGE CAPACITY
China-US West Coast  $1,413  $1,412 0% -26% Tight
China-US East Coast $2,750 $2,719 1% -19% Tight
China-Europe $1,730 $1,625 6% -3% Tight
China-Mediterranean $1,413 $1,404 1% -13% Tight
Europe-US East Coast $1,415 $1,420 0% -3% Manageable
Europe-South America Atlantic $910 $871 4% 44% Manageable
Europe-South America Pacific $1,568 $1,551 1% 19% Manageable
FIGURE 1: FREIGHTOS INTERNATIONAL FREIGHT INDEXES (MAJOR LANES) WEEK ON WEEK AND YEAR ON YEAR
  • Very little movement week on week movement again this week. Making year on year price comparisons are misleading currently for China lanes, because CNY fell out more than two weeks earlier (January 29) last year.
  • Last year China-US rates fell strongly away soon after CNY. This pattern should be repeated this year (refer Figure 2).
FIGURE 2: CHINA-US WEST COAST (L) AND CHINA-US EAST COAST (R) RATES TYPICALLY FALL AWAY AFTER THE CNY SHUTDOWN.
2016 = ORANGE. 2017 = BLUE. STARS = WEEK OF CNY.

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