Key insights:

  1. With the port strike and peak season behind us, transpacific container rates have fallen more than 35% since prices peaked in July, though at more than $5,000/FEU rates are still way above normal and well above the floor hit for this year back in April.
  2. Asia - Europe rates have fallen by 60% since July to $3,500/FEU, about back to April levels. The Red Sea impact means even these rates are triple their level a year ago, but carriers have started blanking sailings and introducing November GRIs – possibly supported by an early start of pre-Lunar New Year demand – in the hopes of pushing rates back up.
  3. Ports in Hamburg and Felixstowe are still dealing with some congestion, and some vessel bunching persists in Shanghai, though waits at Qingdao and Ningbo have decreased.
  4. Middle East - N. America air cargo rates have increased 35% since mid-September to $3.17/kg, a level last seen in March, suggesting that sea-air peak season may already be getting underway.
  5. China - N. America and Europe rates remain elevated on e-commerce demand but have not started a peak season climb yet. Though many expect rates will spike and space will be very difficult to secure when peak season gets underway, others think that the e-commerce pressure on rates and space throughout the year may have pushed enough forwarders and shippers to plan ahead – via front loading or securing Q4 capacity in advance – that peak season will be lively but not chaotic.


Ocean rates - Freightos Baltic Index:

  • Asia-US West Coast prices (FBX01 Weekly) fell 5% to $5,294/FEU.
  • Asia-US East Coast prices (FBX03 Weekly) fell 13% to $5,935/FEU.
  • Asia-N. Europe prices (FBX11 Weekly) fell 3% to $3,523/FEU.
  • Asia-Mediterranean prices (FBX13 Weekly) fell 5% to $3,927/FEU.

Air rates - Freightos Air index

  • China - N. America weekly prices were level at $5.43/kg
  • China - N. Europe weekly prices were level at $3.81/kg.
  • N. Europe - N. America weekly prices increased 2% to $1.85/kg.

AnalysisSome minimal congestion – caused by the three day strike at the beginning of the month – remains at US East Coast and Gulf ports though operations have mostly recovered. Some observers anticipate that the strike will still lead to some capacity and equipment shortages at Asian origins in early November.

For now the pull forward of peak season demand to earlier than usual in the year is leading to easing volumes in October and into November and container rates are falling as a result. Transpacific spot prices to the West Coast are 35% lower than their July peak and 38% lower to the East Coast. But even with easing demand and volume projections for the coming months lower than those in Q2, transpacific rates above $5,000/FEU are still $1,500 - $2,000/FEU higher than during the previous Red Sea crisis-era lull in demand back in April.

Meanwhile, prices for Asia - Europe containers eased to about $3,500/FEU last week, which is 60% lower than the peak in July and about even with the April floor on for this lane. Asia - Mediterranean rates fell 3% to $3,927/FEU last week, which is 50% lower than in July and $400/FEU lower than in April. At the same time, Red Sea diversions’ drain on capacity are still keeping these prices about triple their level a year ago.
Nonetheless, with rates sliding on lower demand carriers have started to increase the number of blanked sailings on Asia - Europe lanes. Ports in Hamburg and Felixstowe are still dealing with some congestion, and some vessel bunching persists in Shanghai, though waits at Qingdao and Ningbo have decreased. There is also anticipation that the pre-Lunar New Year demand increase could have an early start in November as European shippers still have to factor in longer transit times around the Cape of Good hope.

These factors have some carriers hopeful that rates could rebound soon as MSC announced a November GRI to push Asia - Europe rates up to $5,000/FEU with other carriers also rolling out increases.
Though ocean volumes are past their peak for the year, the typical Q4 air cargo peak season should heat up soon. Freightos Air index data shows Middle East - N. America rates have increased 35% since mid-September to $3.17/kg, a level last seen in March, suggesting that sea-air peak season may already be getting underway.

China - N. America and Europe rates remain elevated but do not seem to be increasing yet on peak season demand. B2C e-commerce volumes have kept ex-China demand and rates strong throughout much of the year, doing away with typical seasonality in the market so far this year. And expectations are that when demand increases in Q4 rates could spike even higher and space will be very difficult to secure.
But the e-commerce impact on rates and availability this year may have pushed many forwarders and shippers to plan ahead for peak season either by building up inventories earlier than usual or reserving air capacity in advance. As a result some observers think that space will be tight and rates high during Q4, but will not be as extreme or disruptive as many are anticipating.