For transpacific rates, July was hot, and August will be hotter. China-US West Coast rates ($1,901/FEU) are already 18% higher than the peak of last year’s peak season ($1612/FEU on August 20).
China-US West Coast rates are now very close to breaking the $2,000 barrier for the first time since February 12, 2017, just after Chinese New Year. China-East Coast rates have already broken the $3,000/FEU barrier, for the first time since March 5, 2017.
In ramping up capacity over the past three years, carriers lost their control of the market and prices tumbled. Attempts to raise rates regularly failed, as one or more carriers dropped their rates to win sales. This was a game in which all carriers lost.
But recently, they seem to have emerged from this ‘carriers’ dilemma’ and we are seeing signs of more price discipline. Under this changed game plan all carriers are winning now. Shippers might not approve, but at this level, pricing discipline has to be good for the industry. – Zvi Schreiber, CEO, Freightos
Ocean freight rates
|Week 31||Week 30||Last year*|
|China – US West Coast||$1,901||18%||42%|
|China – US East Coast||$3,073||15%||31%|
|China – North Europe||$1,765||-3%||-2%|
|North Europe – US East Coast||$1,441||-2%||20%|
|* Compared to the corresponding week in 2017|
Since July 1, Emergency Bunker and Peak Season surcharges and three rounds of GRI have all largely stuck. Carriers have already announced GRIs for August 15 and September 1.
Prices are rising, because:
● There have been several service withdrawals since June, with this month seeing THE Alliance
taking out one string,
● Carriers are standing firm, resisting the temptation to undercut competitor pricing to win business,
● US demand for Chinese imports rose from May. Yes, that was in part spurred by US importers
arranging shipments in advance of punitive trade tariffs kicking in.
● The weather even pitched in late last week, with Typhoon Jongdari closing East Asian ports, leading
to rolled bookings which temporarily tightened capacity further
August began with another round of GRIs. By August 5, rates were standing at:
● $1,90/FEU for China-West Coast rates, up $294 increase from the previous week.
● $3,073/FEU for China-East Coast rates, up $409 from the previous week.
Meanwhile, with factories in Europe closing down, China-North Europe rates dropped back slightly last
week, from $1,811 FEU to $1765/FEU.
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/