Just as the January General Rates Increases (GRIs) were losing traction, the mid-month round lifted transpacific prices back up again. The net impact was a 4% week on week rise for both lanes. China-West Coast went up from $2,031 to $2,110, and China-East Cost went up from $3,171 to $3,292.
So, what’s going to happen to transpacific pricing this quarter? As expected, the last two transpacific GRIs stuck – space is almost always tight in the run-up to Chinese New Year. Carriers are cancelling sailings for during the holiday, and for afterward as well, hoping that prices hold for the contract renegotiation season. That strategy usually doesn’t work too well because, seasonally, that’s when demand is dropping off. For instance, prices dropped 20% across March and April last year (23% in 2018). However, the continuing uncertainty surrounding China trade tariffs has been keeping demand artificially high. Moving into spring, then, carriers may have more luck in preventing dramatic price falls.” – Philip von Mecklenburg-Blumenthal, VP of FBX, Freightos
This week’s report
|Week 03||Week 02||Last year*|
|China – US West Coast||$2,110||4%||61%|
|China – US East Coast||$3,292||4%||21%|
|China – North Europe||$1,751||8%||17%|
|North Europe – US East Coast||$1,400||-1%||-1%|
|* Compared to the corresponding week in 2017|
Having lost ground following 1 January GRIs, the mid-month GRI picked up transpacific prices again. The net effect of dipping, then rising prices last week was a 4% week on week rise for both lanes. GRIs are sticking currently because space is tight on sailings – post-Christmas replenishment is in full swing coupled with the Chinese New Year (CNY) bottleneck fast approaching.
China-North Europe prices continue to rise, good news for carriers looking for high prices during that lane’s contract negotiation season. Several carriers have implemented mid-month Freight All Kinds (FAK) increases or fuel-related surcharges (including Hapag-Lloyd’s peak season surcharge). Once China returns to normal after the CNY shutdown, transpacific freight prices usually drop dramatically. Last year, between 25 February and 29 April, West Coast prices fell by 19%, East Coast by 21%. In 2015, between 26 February and 30 April, the corresponding drops were 23% and 26%. Continuing uncertainty over China trade tariffs this year, however, may lift demand and lessen the extent of the seasonal price falls.
The Freightos Baltic Indices reflect weekly spot rates for 40-foot containers based on 12 to 18 million price points collected every week on 12 main shipping trade lanes. The data includes a headline index – the FBX Global Container Index (FBX) – a weighted average of the 12 underlying route indexes. This data is published every Sunday. See www.balticexchange.com/market-information/containers/