1 Transpacific ocean rates decreased slightly this week, but remain well above 2019 levels as demand – despite a downturn – likewise remains elevated, and port congestion, though improving, continues to tie up capacity.
2 Asia - N. Europe rates are 7X their level three years ago, as congestion outpaces falling demand. A planned eight-day strike in Felixstowe starting next week will likely worsen congestion and delays for UK logistics, and put additional pressure on alternative European ports.
3 Falling air cargo volumes are also leading to lower rates on many lanes. The Freightos Air Index China - US West Coast index rate was $6.58/kg last week, which is 38% lower than a year ago but more than 3X pre-pandemic norms for this time of year.
• Asia-US West Coast prices (FBX01 Daily) decreased 3% to $5,738/FEU. This rate is 69% lower than the same time last year.
• Asia-US East Coast prices (FBX03 Daily) fell 2% to $9,150/FEU, and are 54% lower than rates for this week last year.
US trucking data for July shows that volumes and rates have started to normalize, possibly reflecting the trend in ocean imports where volumes are expected gradually to decline through the end of the year – though they are projected to remain well above 2019-levels.
Congestion at some US ports is improving – with waiting ships now in the single-digits off LA/Long Beach, and the line getting shorter in Savannah. But, together with still-strong demand, congestion is still significant enough to keep rates quite elevated compared to typical levels. Asia - US West Coast rates dipped 3% to $5,738/FEU this week, though this price is more than quadruple the rate in August 2019.
Likewise, from February to April, inflation-driven decreases in volumes pushed Asia - N. Europe rates down by 28% – from a record high of more than $15,000/FEU to about $10,500. But since then, severe congestion has contributed to prices that have dipped only about 5%, and are more than 7X the rate three years ago.
European ports are facing additional challenges that could make congestion worse, including low water levels on the Rhine disrupting barge service and multiple labor disruptions.
The latest industrial action is an eight-day port worker strike in Felixstowe – the UK’s largest container port by volume – set to begin on Sunday which would likely worsen congestion and delays for UK logistics, and put additional pressure on alternative European ports. Workers at Liverpool’s port have also authorized a strike, though no date has been set.
Falling air cargo volumes are also leading to lower rates on many lanes. The Freightos Air Index China - US West Coast index rate was $6.58/kg last week, which is 38% lower than a year ago but more than 3X pre-pandemic norms for this time of year.