Ocean rates – Freightos Baltic Index:
- Asia-US West Coast prices (FBX01 Weekly) decreased 2% to $1,887/FEU.
- Asia-US East Coast prices (FBX03 Weekly) dipped 1% to $3,048/FEU.
- Asia-N. Europe prices (FBX11 Weekly) fell 8% to $1,608/FEU.
- Asia-Mediterranean prices (FBX13 Weekly) fell 14% to $2,003/FEU.
Air rates – Freightos Air index
- China – N. America weekly prices increased 4% to $4.78/kg.
- China – N. Europe weekly prices increased 1% to $3.07/kg.
- N. Europe – N. America weekly prices fell 1% to $1.68/kg.
Dive deeper into freight data that matters
Stay in the know in the now with instant freight data reporting
The latest National Retail Federation US ocean import report projects that the relative volume strength – about two million TEU – estimated for August will persist through October, reflecting increased optimism among importers for consumer strength over the holiday season.
These projections have September and October volumes 6-7% higher than in 2019, followed by only a moderate dip in November and December, with volumes about 15% higher than pre-pandemic. This late Q4 strength would be a possible sign of a general restocking cycle, as these goods would arrive too late for the holidays.
Transpacific rates to the West Coast have come down slightly, about 7%, so far this month, and prices to the East Coast have been about level. This relative stability in September – though these rates, even with elevated volumes, are still partially facilitated by significant capacity restrictions by carriers – could point to the consistency in volumes projected by the NRF and the possibility of a moderate but sustained peak through October.
But easing rates – even slight declines – in the weeks just before Golden Week when there’s typically upward pressure on prices, together with many anecdotal reports of decreasing ocean bookings, point the other direction.
In our recent market update webinar, Robert Khachatryan, CEO of freight forwarder Freight Right Logistics, said that many of their customers are reporting “drops in orders and expectations of a drop in consumer spending in Q4,” and that falling rates ahead of Golden Week only add to skepticism that this year’s peak will persist through September or beyond.
If demand is easing as capacity continues to increase, carriers will face further challenges to keeping rates elevated.
The overcapacity in the market is forcing some to idle new ultra large vessels even before their maiden voyages from Asia to Europe. Rates on this lane fell 8% last week to $1,608/FEU, though prices remain slightly above 2019 levels. In response, carriers are announcing additional blanked sailings even in the weeks after the Golden Week holiday, suggesting that demand is expected to decrease in the weeks that are typically Asia – N. Europe’s peak season period.
Though ocean volumes reportedly remain strong for Asia – Mediterranean trade, rates fell 14% last week, and are continuing to fall this week to about $1,800/FEU. This level is the lowest for this lane since 2019 and is just below the September 2019 mark. This decline is likely driven by carriers adding too much capacity in recent months as demand proved resilient, and carriers are now removing capacity to try and match volumes.
Carriers likewise shifted too many vessels to transatlantic trade for much of this year even as volumes declined, and prices have been falling for much of the past year as a result. Rates fell another 7% last week to less than $1,100/FEU – 45% lower than in 2019 – and carriers have announced a significant increase in blanked sailings to try and push rates back up.
Signs of a muted ocean peak season are leading to pessimism about the strength of air cargo’s peak season in the coming months. In the meantime though, Khachatryan reports seeing “some uptick in demand for transpacific air bookings in the last few weeks,” which, together with the sluggish rebound of tourism in China not adding as much passenger capacity compared to many other regions, may account for the 37% increase in China – N. America Freightos Air Index rates to $4.78/kg since early August.
Freight news travels faster than cargo
Get industry-leading insights in your inbox.