Hurricane Michael may be closing gulf coast ports at present, but the China-US trade war is still the biggest storm affecting US ocean freight prices.
Since early summer, they have motivated many importers to advance orders and beat new tariffs, effectively creating an early start to peak season.
After the current Golden Week lull, they will exert more upward pressure on prices as many importers hit by the latest tranche place advanced orders to get their shipments in before the tariff increases to 25%.
They may soon be having the opposite effect, depressing demand, and price if enough importers switch their sourcing to cheaper countries.
This week’s report
|Week 40||Week 39||Last year*|
|China – US West Coast||$2,311||1%||59%|
|China – US East Coast||$3,488||-1%||73%|
|China – North Europe||$1,486||-16%||7%|
|North Europe – US East Coast||$1,515||-7%||34%|
|* Compared to the corresponding week in 2017|
The past three weeks have been the (Golden Week) eye in the (Tariff War) storm. The two most recent transpacific GRIs were cancelled, so prices have levelled out on both the China/East Asia-North America West Coast (left graph) and the China/East Asia-North America East Coast (central graph) lanes.
It’s a different story, though, on the China/East Asia-North Europe lane. With no trade tariffs spurring demand, ocean carriers have had to react to chronic oversupply depressing prices. First, they cut services, but in an about-turn, three of the largest carriers recently cut their FAK rate. That has sent prices falling (right graph). Over the past four weeks, they’ve dropped 32%, from $2,201 to $1,486.
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/