- Ocean rates started easing in August after peak season but remain higher than 2019 levels.
- Red Sea congestion and the looming ILA strike continue to influence market rates.
- Asia-to-Europe and North America rates showed mixed trends with potential further declines expected.
In August 2024, ocean freight rates on major global trade lanes showed signs of easing after peaking mid-summer. However, several factors, including Red Sea congestion and looming labor strikes in the US, kept rates above typical levels, reports Baltic Exchange.
Easing Ocean Rates After Peak Season:
Ocean freight rates began leveling off in August after a peak earlier in the summer. Rates had been pushed higher due to an early start to the peak season, strong demand, and congestion, particularly in the Red Sea. A
lthough rates eased, they remain elevated compared to historical levels, with less upward pressure expected in September as demand wanes.
Asia to Europe and Mediterranean Rates Decline:
Ocean rates from Asia to Europe and the Mediterranean fell in August. Prices for Asia to North Europe dropped by 5% month on month to $7,965/FEU, though they are still five times higher than in August 2019. Similarly, rates to the Mediterranean fell 9% to $7,099/FEU, remaining 211% higher than 2019 levels.
The upcoming Golden Week and extended journey times around the Cape of Good Hope may lead to further rate reductions in the coming weeks.
Fluctuating Rates from Asia to North America:
Rates from Asia to the West Coast of North America initially dropped 20% from their July peak but later increased by 10% in late August, ending the month at $7,115/FEU. This figure is still 7% lower than in July but 455% higher than 2019 levels.
Market conditions suggest that rates may decrease further as demand slows and capacity rises, with reports of some carriers offering discounts.
Impact of Possible ILA Strike on East Coast Rates:
A potential strike by ILA port workers at East Coast and Gulf ports in October could further affect rates. Some urgency to ship goods to the US East Coast before the union contract expires has put upward pressure on spot rates.
Prices from Asia to the East Coast dipped only 1% in August to $9,698/FEU but are 268% higher than 2019 levels. If the strike happens, rates to the West Coast could rise as shippers divert their goods, leading to increased congestion.
Transatlantic Rates Stay Stable Despite Capacity Shifts
On the transatlantic route, rates remained steady at $1,800/FEU for most of the year despite increased demand. This stability was due to enough capacity being retained, even with Red Sea diversions. In August, rates dipped by 10% to $1,619/FEU, though carriers have announced upcoming rate hikes, some as high as $1,000/FEU, for September.
Despite this, many shippers remain skeptical about the feasibility of such increases.
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Source: Baltic Exchange
