Key insights:

1. China - N. America and Europe air cargo rates have still not spiked, even as we enter key peak season weeks. One reason for this relative calm is carriers’ significant Q4 capacity shift to ex-Asia lanes.

2. But the resulting capacity reduction on other lanes is pushing rates up for those trades. Transatlantic rates pushed past $2.80/kg last week, 33% higher than a year ago and its highest level since April 2023.

3. Frontloading ahead of a possible January ILA port strike and expected tariff hikes next year have kept transpacific ocean rates elevated to start December, with rates to the West Coast already above their pre-LNY 2024 levels seen back in January.

4. Some carriers will reportedly introduce December GRIs, but with the arrival window to receive goods before the strike closing, a significant amount of inventories already built up from Q3 frontloading, and likely still a runway of several months before tariffs go into effect, carriers may not succeed in increasing rates until later in December or early January ahead of Lunar New Year.

5. Asia - Europe ocean rates were level last week but started to climb this week, with daily prices to the Mediterranean approaching $6,000/FEU on December GRIs for a $1,000/FEU gain vs November.

6. If these increases stick, they may reflect both an increase in blanked sailings and an early start to pre-Lunar New Year demand. Moving enough volume before LNY is especially important for Europe and Mediterranean shippers facing long Red Sea-driven lead times – if they miss that pre-holiday window they will face a long wait for new shipments to arrive.

Air rates - Freightos Air index

• China - N. America weekly prices decreased 4% to $6.62/kg

• China - N. Europe weekly prices fell 10% to $3.63/kg.

• N. Europe - N. America weekly prices increased 2% to $2.81/kg.

Ocean rates - Freightos Baltic Index:

• Asia-US West Coast prices (FBX01 Weekly) fell 4% to $4,905/FEU.

• Asia-US East Coast prices (FBX03 Weekly) climbed 13% to $6,095/FEU.

• Asia-N. Europe prices (FBX11 Weekly) were level at $4,491/FEU.

• Asia-Mediterranean prices (FBX13 Weekly) rose 6% to $5,135/FEU.

Analysis

Freightos Air Index data show that ex-China rates to N. America and Europe have still not spiked, even as we enter the key peak season weeks for early December. In addition to some shippers’ and forwarders’ frontloading and securing capacity in advance, another important reason for the relatively tame peak season despite still-surging e-commerce volumes is carriers’ significant shift of freighter capacity to ex-Asia lanes in time for Q4.

And with that capacity being moved from lower-volume lanes, prices on those trades are increasing. Transatlantic rates pushed past $2.80/kg last week, 33% higher than a year ago and its highest level since April 2023.

Some frontloading ahead of a possible ILA port strike after January 15th and expectations of tariff increases next year have kept transpacific ocean rates elevated to start December, with rates to the West Coast – even before the Lunar New Year 2025 rush – already above their pre-LNY 2024 highs seen back in January at the start of the Red Sea crisis. Some carriers are reportedly introducing significant GRIs to try and push rates higher to start the month.

But the arrival window to move shipments from Asia to the East Coast before the strike deadline is closing, a significant amount of inventories were already built up from frontloading ahead of the October strike, and there is likely still a runway of at least several months before tariffs go into effect. These factors may make early December rate increases difficult to sustain, though prices could increase later in the month or early in January ahead of Lunar New Year.

Asia - Europe rates were level last week but have started to climb so far this week, and daily prices to the Mediterranean are approaching the $6,000/FEU mark on December GRIs for a $1,000/FEU gain compared to the end of November.

If these increases hold, they may reflect a combination of effective capacity management by carriers through an increase in blankings and an early start to pre-Lunar New Year demand. Ensuring necessary orders are moved before LNY is especially important for shippers to the Mediterranean who have the longest additional lead times due to continued Red Sea diversions and, if they miss that pre-holiday window, will face a long wait for new shipments to arrive.

Carriers continue to announce adjustments to their services that will go into effect with the alliance reshuffle in February, with MSC adding more port pairs to its stand alone services, and the Gemini Cooperation already accepting bookings for its new hub and spoke model.