Here are Key Insight quotes from Judah Levine, Freightos' Head of Research:

1. "The combination of an early peak season and Red Sea diversions has created tight capacity and significant port congestion, pushing ex-Asia ocean spot rates to around $7,000/FEU to the West Coast and Northern Europe—40-50% above their Q1 peaks. Rates to the East Coast have surpassed $8,000, levels last seen when prices were coming down from pandemic highs in late 2022."

2. "As transpacific demand is projected to peak in August, we anticipate rates to continue climbing. Some Asia-Europe lanes have already announced rate hikes for July, which could see prices reaching approximately $10,000/FEU."

3. "Congestion and port omissions, coupled with the shift of more capacity from regional to long-haul services, have led to rate increases on intra-regional trade lanes. Notably, East Asia to India rates have quadrupled since early April."

4 "While congestion continues in Barcelona, it's easing in Singapore, Malaysia, and China, partly due to increased transshipment through India, which is now experiencing its own congestion issues."

5. "Port workers in France postponed planned strikes until September, while Canada’s Industrial Relations Board is expected to issue a ruling allowing a rail union to strike soon."

6. "Despite increased scrutiny by US Customs, air cargo volumes driven by e-commerce remain strong. Rates from China to North America stayed elevated at $5.43/kg, and to Europe at $4.33/kg last week, indicating persistent demand in the market."

Ocean rates - Freightos Baltic Index:

• Asia-US West Coast prices (FBX01 Weekly) increased 15% to $6,840/FEU.

• Asia-US East Coast prices (FBX03 Weekly) climbed 7% to $8,113/FEU.

• Asia-N. Europe prices (FBX11 Weekly) climbed 8% to $7,001/FEU.

• Asia-Mediterranean prices (FBX13 Weekly) increased 4% to $7,169/FEU.

Air rates - Freightos Air index

• China - N. America weekly prices decreased 1% to $5.43/kg

• China - N. Europe weekly prices increased 1% to $4.33/kg.

• N. Europe - N. America weekly prices fell 1% to $1.62/kg.

Analysis

The combination of an early peak season, Red Sea diversions making capacity tight and knock-on port congestion making supply even tighter meant ex-Asia ocean spot rates continued to climb last week.

Prices from Asia to N. America West Coast and to N. Europe increased to about $7,000/FEU, exceeding their previous 2024 highs in January and February by 40 - 50%. East Coast rates are now above $8,000/FEU, 20% higher than in February, with rates for all these lanes last at these levels during their comedown from pandemic highs in the summer and fall of 2022.

With transpacific demand projected to peak in August rates are likely to continue climbing, with additional surcharge hikes and General Rate Increases announced for July to N. America and to Europe which could push rate levels up to about $10k/FEU on some lanes.

Congestion, port omissions and the shifting of more capacity from regional to long haul services are also leading to a wide array of surcharges and rate increases on lower-volume and intra-regional trade lanes. Freightos Terminal data show, for example, that some East Asia - India rates have about quadrupled since early April.

Major carriers and regional operators adding East - West capacity is unlikely to put much downward pressure on transpacific or Asia - Europe rates though, as the addition of a significant number of newbuild vessels has not reversed the trend so far this year either.

Congestion continues to be a problem in Barcelona, but is reportedly easing in Singapore, Malaysia and China. This improvement may partially be due to the increased use of India’s Mundra Port for transshipment as an alternative, which in turn is leading to some increased congestion there.

On the labor front, port workers in France have postponed their planned strikes until September following the announcement of snap elections. A rail worker strike in Canada, however, may be getting closer as the Industrial Relations Board – tasked with determining the legality of a strike – is expected to issue a final decision allowing the union to act soon.

Despite a recent increase in US Customs scrutiny of e-commerce imports, air cargo volumes have remained strong. Freightos Air Index rates out of China remained elevated last week at $5.43/kg to N. America and $4.33/kg to Europe. Air cargo rates out of S. Asia and the Middle East remain elevated but level despite expectations that the recent increase in ocean delays and costs would cause some additional ocean to air shift.

Freightos Terminal data show that ocean rates from Shanghai to the UAE have increased 115% to almost $5,000/FEU since early April, which, together with delays due to port congestion in Jebel Ali, may be making an additional push to sea-air service less attractive to shippers looking for an alternative that is faster than ocean freight but less expensive than direct air cargo.