• China-US West Coast prices (FBX01 Daily) are currently $1,472/FEU, down 10% from last week and now even lower than they were on June 1. However, with space still tight, carriers will no doubt follow through with price increases next month. Last year, the August GRI brought container prices to $1,600, where they stayed throughout peak season. This August will likely see a similar, if slightly more tempered, rate increase.
• China-US East Coast prices (FBX02 Daily) are currently $2,941/FEU, virtually unchanged from last week, meaning the minor mid-month price increase has held. Prices are up 12% from the end of June and 11% on this time last year.
Commentary
“Despite gloomy economic forecasts and lowered World Bank projections, both transpacific rates and volumes will likely increase come August. Why? The accumulation of potential risk factors later this year, including the switch to low-sulfur (and higher cost) fuel, trade disruptions from EU tariffs, Brexit and security issues in the Persian Gulf. Finally, given lower year on year rates, there’s a potential that BCO’s reneging on contracts could create more confusion. However, given that most of these are cause for front-loading rather than an indicator of persistent demand, a large rate increase in early August does not necessarily mean that those prices will stick throughout peak season.
