- The Freightos Baltic Index fell 25% in February due to post-Lunar New Year demand drops but remains 80% above 2019 levels due to Red Sea diversions.
- Asia–Europe and Transpacific rates saw sharp declines, with Asia–Europe down 50% since January and US West Coast rates falling 38%.
- Future rates depend on US- China tariffs, factory recovery, and possible shipping diversions to Canada.
The Freightos Baltic Index (FBX) dropped 25% in February to $2,755/FEU, reflecting reduced demand following the Lunar New Year. Despite this decline, rates remain significantly higher than pre-pandemic levels due to ongoing Red Sea diversions, which continue to impact market capacity, according to Baltic Exchange.
Global Freight Rates Decline Post-Lunar New Year
Freight rates on Asia–Europe routes saw notable declines, with Asia–Mediterranean prices falling 19% month-on-month to $4,129/FEU and Asia–Europe rates dropping 28% to $2,954/FEU. Compared to early January, prices are now 50% lower, marking the lowest levels since the Red Sea crisis began, despite weather and labor-related congestion at European ports. Increased competition among newly restructured alliances may also be contributing to downward rate pressure.
Transpacific Rates Decline and Market Uncertainty
Transpacific shipping rates saw sharp declines, with rates to the US West Coast falling 27% to $3,625/FEU in February, marking a 38% post-holiday drop. Rates to the US East Coast decreased 31% to $4,622/FEU, driven partly by reductions in peak season surcharges. The temporary demand dip is attributed to factory production delays following the holiday period.
Container prices on these lanes are nearing their lowest levels for 2024. Late-2023 price surges were primarily due to shippers frontloading cargo ahead of anticipated tariff hikes, but February’s declines suggest that much of this inventory buildup has already occurred.
A key factor influencing future freight rates is the US Trade Representative’s proposed tariff rule, which would impose fees of $500,000 to $1.5 million on Chinese carriers or vessels with China-made ships calling at US ports. If enacted in April, this policy could push container rates higher and redirect some shipments to Canadian hubs. Additionally, the impact of potential new US tariffs on China will play a crucial role in determining transpacific shipping trends and the intensity of the peak season in 2024.
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Source: Baltic Exchange
