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May 21, 2024 Update

The Freightos Weekly Update helps you stay on top of the latest developments in international freight by giving you the rundown on the latest economic data, ocean and air demand trends, rate data – and anything else impacting the market.

Judah Levine

Weekly highlights

Ocean rates – Freightos Baltic Index

  • Asia-US West Coast prices (FBX01 Weekly) increased 12% to $4,333/FEU.
  • Asia-US East Coast prices (FBX03 Weekly) climbed 5% to $5,359/FEU.
  • Asia-N. Europe prices(FBX11 Weekly) increased 11% to $4,603/FEU.
  • Asia-Mediterranean prices(FBX13 Weekly) increased 6% to $5,495/FEU.

Air rates – Freightos Air Index

  • China – N. America weekly prices stayed level at $5.86/kg
  • China – N. Europe weekly prices increased 11% to $4.00/kg
  • N. Europe – N. America weekly prices increased 1% to $1.75/kg.

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Analysis

Unseasonal increases in demand for ocean freight out of Asia – due to the possible start of a restocking cycle in Europe, and a pull forward of peak season demand by N. American importers out of concern over labor or Red Sea disruptions later in the year – are putting additional strain on a container market already stretched thin by Red Sea diversions. 

Even with fleet growth from new vessels being applied to add more ships to rotations and accommodate longer journeys around the south of Africa, carriers are still facing a capacity shortage. This shortage is leading to late arrivals and port omissions as carriers skip some port calls to try and keep up with weekly schedules at major hubs. Delays and omissions are contributing to reports of empty container shortages and congestion due to vessel bunching at some ports in China, with congestion also a problem in Singapore and Malaysia. 

Increasing demand, tight capacity and delays are combining to push ocean rates up from their already elevated Red Sea-adjusted floors reached in April. 

Weekly prices rose last week and continued to climb this week, with the latest daily rates on the transpacific up to about $4,800/FEU to the West Coast and $5,800/FEU to the East Coast, for about a 40% increase since the end of April. The latest Asia – N. Europe rates are up about 50% since April to almost $5,000/FEU with prices to the Mediterranean above $5,600/FEU and 3.5 times higher than in 2019.

Carrier announcements of additional rate increases set for June show they do not expect demand to ease or conditions to improve in the short term. CMA CGM is setting Asia – N. Europe rates at $6,000/FEU starting June 1st, and Hapag-Lloyd has announced an Asia – N. America Peak Season Surcharge of $600/FEU to start June that will climb to $2,000/FEU mid-month. 

In other ocean developments, two months after its collision with the Key Bridge in Baltimore, crews refloated the Dali and removed it from the crash site.  Fully restored access to the port is expected by the end of the month, with Maersk already accepting Baltimore bookings for June.

In Canada, a government review of which services must be excluded from a union strike will likely delay the planned rail worker strike for at least the next 60 days, though the sides are reportedly still no closer to a resolution.

Finally, increases in ocean rates and delays could push some additional demand to the air, though no significant shift seems to have started just yet.  

Freightos Air Index rates from China to N. America were level at $5.86/kg last week though prices to Europe rebounded 11% to their early-month level of about $4.00/kg.

Prices out of S. Asia, where Red Sea-driven ocean delays have had the strongest impact on air demand and rates, were level at $5.40/kg to N. America and $3.95/kg to Europe last week, though they remain about double their levels before Red Sea diversions started. 

Rates from the Middle East to N. America, which had been elevated from a shift to sea-air options, have eased by 15% in the last couple weeks to $2.52/kg.

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Judah Levine

Head of Research, Freightos Group

Judah is an experienced market research manager, using data-driven analytics to deliver market-based insights. Judah produces the Freightos Group’s FBX Weekly Freight Update and other research on what’s happening in the industry from shipper behaviors to the latest in logistics technology and digitization.

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