Weekly highlights
Asia-US West Coast prices (FBX01 Weekly) increased 1% to $5,969/FEU.
Asia-US East Coast prices(FBX03 Weekly) were level at $7,552/FEU.
Asia-N. Europe prices(FBX11 Weekly) increased 5% to $6,480/FEU.
Asia-Mediterranean prices(FBX13 Weekly) fell 1% to $6,920/FEU.
China – N. America weekly prices decreased 2% to $5.46/kg
China – N. Europe weekly prices increased 26% to $4.27/kg.
N. Europe – N. America weekly prices fell 2% to $1.63/kg.
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Analysis
Ocean rates out of Asia were stable last week but have already started climbing on mid-month Peak Season Surcharge increases this week as demand remains strong and Red Sea-driven congestion persists in both the Western Mediterranean and the Far East.
Strong demand and high spot rates have some long-haul carriers adding transpacific and Asia – Europe services. Smaller regional carriers are also entering transpacific trade for the first time since the pandemic. But with capacity already stretched thin, the shift of vessels to East-West lanes may contribute – like it did in 2021 and 2022 – to higher rates on regional and lower-volume lanes as well.
Some US forwarders report that most of their recent demand increase is from specific product categories being pulled forward ahead of August tariff increases on some Chinese goods.
The recent increase in delays and prices may also be putting pressure on many shippers to move seasonal goods now before rates climb further or to avoid delays later in the year which could threaten inventory availability in Q4. Concern over a possible East Coast and Gulf port labor strike in October is also playing a role. Some transpacific carriers are already fully booked through July.
For Asia – Europe trade – where recent port strikes in Germany and France are an added complication – some of the current volume increase reportedly includes peak season goods, though July tariffs may also be driving some demand.
But with tariff-driven volumes likely to decline in the coming months, and if an early start to peak season means a significant share of seasonal goods are being pulled forward for the above reasons, demand pressure could ease earlier than usual too.
The National Retail Federation projects US ocean imports will peak at 2.17 million TEU in August – a level last reached in 2022 – before easing in September and October, suggesting a somewhat early decline and the likelihood that July and August will see congestion and rate levels at their highest.
But Houthi attacks continue to make the Red Sea unsafe, and increases in charter activity and rates indicate carriers expect congestion to remain a factor for some time. So a seasonal rate decline in Q4 will likely go no lower than prices seen in March and April which were still about double 2019 levels.
Freightos Air Index data show air cargo rates have remained stable on most lanes despite the recent increase in ocean delays and prices. China – N. Europe rates which had been easing in June, however, rebounded to May levels of about $4.25/kg last week, possibly on a combination of a renewed ocean to air shift and continued B2C e-commerce volume strength.
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