- Rates surged in early January due to Lunar New Year demand before stabilizing.
- The Red Sea crisis continues, with a ceasefire pausing Houthi attacks but carriers remaining cautious.
- Asia-Europe and Mediterranean rates spiked due to longer diversions, then declined.
- Transpacific rates followed seasonal trends, rising before Lunar New Year and easing after.
- US-bound shipments remain high as businesses frontload cargo ahead of potential new tariffs.
An unusually early Lunar New Year at the end of January led to a temporary rise in container rates before stabilizing toward the end of the month. However, uncertainties surrounding new tariffs under the incoming Trump administration and the ongoing Red Sea crisis are expected to maintain volatility in the near term.
The Freightos Baltic Index Global benchmark initially rose by 13% in early January due to pre-Lunar New Year demand before declining by 4% from December’s end, settling at $3,656 per FEU.
Impact of Red Sea Disruptions on Global Rates
Despite an agreement between the ILA union and USMX that prevented a January strike at US East Coast and Gulf ports, global container rates remain significantly elevated—128% higher than in 2019—due to continued instability in the Red Sea. Although the first phase of the Israel-Hamas ceasefire temporarily halted Houthi attacks, shipping lines are reluctant to resume transit through the Suez Canal without stronger assurances of long-term security.
Rate Trends Across Major Shipping Routes
Shipping rates from Asia to Europe and the Mediterranean surged earlier than usual due to longer transit times caused by Red Sea diversions. Rates to Europe climbed 53% from early November to December, reaching a peak of $5,600 per FEU in mid-January before falling to $4,122 per FEU by the end of the month, reflecting a 20% monthly decline. Similarly, Asia-Mediterranean rates peaked at $5,685 per FEU in mid-January before settling at $5,075 per FEU, marking a 7% drop from December.
The Transpacific route followed typical seasonal patterns, with rates rising by 23% to $5,929 per FEU in early January before decreasing to $4,938 per FEU by month-end, still maintaining a slight 2% increase from December. Rates to the US East Coast also saw a 13% increase in early January, peaking at $6,934 per FEU before easing to $6,656 per FEU, which was still 9% higher than the previous month.
With the resolution of labor negotiations between the ILA and USMX, the threat of a labor strike was avoided, preventing disruptions that could have led to surcharges and additional rate hikes. Transatlantic rates remained relatively stable at $2,172 per FEU.
Potential Market Reactions Post-Lunar New Year
A modest rebound in Transpacific rates is possible after Lunar New Year as some shipments were deferred due to holiday-related slowdowns. However, this uptick is expected to be short-lived, with demand likely stabilizing in February.
Meanwhile, the Trump administration’s tariff plans have led to an increase in shipment volumes into the US, as businesses seek to frontload cargo before any new trade restrictions take effect. This preemptive demand surge is likely to sustain elevated container rates in the short term, followed by a potential decline once the tariffs are implemented or if trade policies shift.
Future Outlook and Market Adjustments
Ex-Asia shipping lanes continue to experience higher-than-usual freight rates due to persistent disruptions in the Red Sea. Despite the ceasefire, most carriers remain hesitant to return to the Suez route. If and when Red Sea transits resume, an adjustment period could follow, lasting several weeks. This shift could lead to vessel bunching, scheduling disruptions, and temporary port congestion in both Europe and Asia, potentially causing short-term upward pressure on freight rates before normalization occurs.
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Source: Baltic Exchange
