Highlights

With continuing uncertainty over a potential escalation of trade tariffs on Chinese imports, the mid-month GRI round barely influenced transpacific prices. China-East Coast prices rose by just 1% and West Coast prices actually dropped.

“Importers have been front-loading transpacific shipments to beat January 1’s tariff increase. But, then what happens to demand? Two weeks ago, when President Trump was threatening an additional $260 billion in China trade tariffs, it looked like demand would stay high. Come last Friday, the President expressed confidence that the Chinese wanted to make a deal. However, the next day, Vice President Pence threatened to “more than double” the amount of tariffs. Given these mixed signals, it’s no surprise that November 15’s GRIs barely made a blip on the radar. Expect similar with the GRIs scheduled for December 1 and 15. Unless, of course, there is a definitive turn of events with the China trade tariff saga.” says Zvi Schreiber, CEO, Freightos

Air Freight Rates

In the last three weeks, average China-US general rates have risen from $4.42 to $4.67 and now to $4.73. With the rush to get stock in before Black Friday and Cyber Monday largely over, prices didn’t rise as much this week.

With no capacity constraints on the Europe-US lane, average general rates remain unchanged from last week. In fact, some airlines are still publishing promotional fares, for instance on services from Barcelona and Heathrow.

Air freight bookings on Freightos for October were up month on month – a full 30 percentage points higher than in October 2017.

Ocean Freight Rates

*Compared to the corresponding week in 2017

Peak season is over for the China-Europe lane. This week's $1,474 is a mere 67% of where priceswere just ten weeks ago ($ 2,201 on September 9). 2M resuming the AE2/Swan Asia-North Europe loop next month should see prices drop further.

The mid-month GRI was a dud, with China-East Coast average prices rising by just $41. On the China-West Coast lane, where carriers have been more active in temporarily increasing supply, prices actually fell. Carriers have announced further GRIs for December 1 and 15.

Despite that, China-West Coast prices were above the $2,000 mark for the 15th week in a row. The last time it breached this mark was the week before Chinese New Year in 2017. Similarly, the China-East Coast prices breached the $3,000 mark for the 16th straight week.

Continuing high transpacific ocean prices reflects increased demand. LCL and FCL bookings on Freightos went up 40% and 42%, respectively in October, a marked contrast to last year when there was no increase at all.

The following graph illustrates the impact of trade tariffs on China/North Asia to North America West Coast prices. They rose soon after the first tariff was announced in June and have stayed high since. This is in stark contrast to last year, when, without nothing to spur demand, chronic overcapacity saw prices actually falling most weeks from late August onward.