Ocean rates from China to the US West Coast fell 14% this week, the largest single-week drop since before the pandemic, likely due to some easing of seasonal demand surrounding Chinese New Year. But rates are still expected to stay elevated on strong demand as well as on congestion and delays into H2.
- China-US West Coast prices (FBX01 Daily) fell 14% to $4,250/FEU. This rate is 226% higher than the same time last year.
- China-US East Coast prices (FBX03 Daily) dipped 2% to $5,733/FEU, and are 123% higher than rates for this week last year.
Ocean freight rates from Asia to the US West Coast recorded their first significant retreat in months, decreasing 14% to $4,250/FEU, back to about the level it held for most of January, but still 226% higher than this time last year.
This decline could be this year’s version of the typical post-Chinese New Year (CNY) dip in demand and rates. Prices increased as usual ahead of CNY as shippers worked to get shipments out ahead of the holiday break. But rates kept climbing to the US during and just after the holiday, possibly due to more of China’s manufacturing staying open this year due to travel restrictions.
And though rates are falling, they will likely stay very elevated for some time. With US retail inventory levels still low, restocking to normal levels could take to the end of the year, and consensus among the major carriers is that any easing in demand – and congestion and delays – won’t happen until at least Q3. And recent increases in fuel surcharges won’t help ease upward pressure on rate either.
Freightos.com marketplace data show that air cargo rates from Asia to major US and EU destinations dropped post-CNY by 15-25% percent though volumes stayed higher than usual over the break as some factories stayed open over the holiday.
- Judah Levine, Research Lead