- Transpacific Container Rates Fall 35% After Peak Season Surge.
- Asia-Europe Container Rates Drop 60% from July Peak Amid Lower Demand.
- Port Congestion Persists in Europe and China as Demand Eases.
Transpacific container rates have plunged more than 35 per cent from July highs and remain above $5,000 per Forty-Foot Equivalent Unit. The Asia-Europe trades have fared similarly, with rates tumbling by 60 per cent since July to around $3,500 per FEU—which sent them back to April levels. Still three times high in the Red Sea region, rates are still at those levels and with carriers blanking sailings, November GRIs are planned to stabilise rates, possibly buoyed by early pre-Lunar New Year demand, reports Ajot.
Europe and China Port Updates
Lags in port traffic remain high at bigger ports such as Hamburg and Felixstowe. Shanghai’s minor vessel bunching persisted. The waits have eased up at Qingdao and Ningbo, so traffic is finally easing up there.
Air Cargo Rate Surge Signals
Air Freight Rates from Mideast to North America Up 35% Since Mid-September, Now $3.17 per kg, Level Last Seen in March. However, this growth does indicate that peak season action is starting to creep in a bit earlier than usual. China-North America and Europe rates are elevated due to e-commerce demand, but to date, no additional rate increases have been announced as part of peak season. Both rate and tight space availability spiking in Q4 is expected; yet, most forwarders are front-loading capacity ahead of peak season pain.
Freight Rate Indexes and Spot Price Trends
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 – AND. European weekly prices were level at $3.81/kg.
- Europe – N. America weekly prices increased 2% to $1.85/kg.
Forward Outlook
Limited congestion continues in East Coast and Gulf ports after a three-day strike last week, but the trend has returned to nearly normal. A number of analysts believe Asian port equipment will start to get short by early November, given the residual effects of the strike. The frontloading of peak season volume into the third quarter is forcing volumes down in October and November, as well as reducing container rates. Transpacific spot prices are now 35-38% lower than July’s. However, they remain $1,500-$2,000/FEU higher than the lows seen in April during the Red Sea debacle.
Asia-Europe and Mediterranean Rate Trends
Asia-Europe container prices fell $3,500/FEU last week, declining 60% since July and near the bottom reached in April. Asia-Med space when available slipped 3% to $3,927/FEU last week, 50% off the July high but $400/FEU off April’s level. The Red Sea diversions continue to oblige carriers to run with reduced capacity, keeping rates nearly three times the level of a year ago. Carriers have begun blanking more and more sailings on Asia-Europe routes, and they also introduced general rate increases for November. Under these circumstances, MSC has announced plans to drive rates up to $5,000/FEU.
Early Preparations for Q4 Peak Season in Air Cargo
Ocean volumes were over the annual peak, but expect intensification in the air cargo season during Q4. Middle East to North America rates surged, while e-commerce demand from China kept rates elevated throughout the year. Many shippers and forwarders preplanned capacity or built inventories to avoid expected Q4 shortages which may reduce peak season disruption. While Q4 is expected to have tight space and high rates, many forwarders will start getting an early head on some of the typical peak season pressure.
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Source: Ajot
