Key insights:

1. Ocean rates ex-Asia have levelled off for the most part, with Asia-US East Coast falling 6%, US West Coast increasing 6%, and Asia-Europe 

2. Strong demand and ocean carriers moving capacity to more lucrative lanes has pushed transatlantic rates up 20% since the end of January to $2,198/FEU after staying mostly on par year on year since the start of the pandemic.

3. Freightos.com search data shows port congestion at LA/Long Beach is leading shippers to look for alternative destinations, mostly on the East coast. 

China-US rates:

  • China-US West Coast prices (FBX01 Daily) increased 6% to $4,514/FEU. This rate is 239% higher than the same time last year.
  • China-US East Coast prices (FBX03 Daily) fell 6% to $5,416/FEU, and are 112% higher than rates for this week last year.

Analysis

Post Chinese New Year, demand remains unusually strong, which is keeping ex-Asia ocean rates extremely elevated, though not pushing them any higher for the most part. 

Prices from Asia to the US East Coast dipped 6% while rates increased 6% to the West Coast after falling 14% last week. Prices from Asia to Europe went unchanged.

But demand is expected to stay very strong during the first half of the year. Retail import volumes during H1 are not only expected to be up 23% on the depressed totals of the first half of 2020, but also exceed H1 2019 by 11%.  

The sustained surge means that port congestion and delays – especially in the ports of LA and Long Beach – won't likely ease any time soon. As a result, more carriers are cancelling or diverting services to avoid those ports.

Freightos.com marketplace search data shows that US SMB importers are looking for alternatives too. 

While shippers importing from Asia had been choosing LA/Long Beach as their destination about 60% of the time from April through November, by January that share had dropped to 48%. Instead, importers were increasingly looking for alternative West Coast ports or East Coast destinations. 

Demand has also been strong on the transatlantic. Strong volumes plus a growing trend of carriers removing capacity to allocate to more lucrative lanes, have pushed rates up 20% to $2,198/FEU in the last six weeks after staying on par year on year for the most part since the start of the pandemic.

Expensive and unreliable ocean freight is also pushing shippers who can afford it to air cargo instead. And though healthy demand has now pushed global air cargo volumes back to pre-COVID levels, these volumes combined with still-limited capacity from passenger jets, is likely to keep rates elevated for some time.