- Sharp Decline in Transpacific Rates as Peak Season Ends Early
- Transpacific Rates Stay Above April Lows Due to Strike and Tariff Concerns
- Montreal Port Workers Stage Strikes, Impact on Operations Minimal
Asia-Europe ocean freight rates have fallen to the lowest levels since the Red Sea crisis. Although they are still about twice their long-term averages, the low rates reflect the early end to peak season and the likely pre-Lunar New Year lull, since the holiday falls in late January this year. Shippers may bring forward orders to compensate for longer sailing times, which could trigger an early rate recovery, reports AJOT.
Transpacific rates fall
A pre-peak season end on transpacific routes led to big drops in container rates throughout October. East Coast rates dropped at a dramatically quicker pace considering the strike deadline of 1st Octoberand had even dropped below West Coast rates, which dropped by 19% to reach $5,540/FEU at the month’s end. East Coast rates dropped by 13% to reach $5,165/FEU with a drop of 41% since September.
Transpacific Rates Remain Above Lows
Transpacific rates, despite their October decline, remain $1,000 overApril lows. Among the reasons are the threat of a January 15th East Coast port work stoppage if the ILA-USMX fails to agree on a newcontract. And the threat of President-elect Trump’s proposed increasein tariffs, forcing importers to order ahead in advance of new tariffs tobe implemented.
Port workers in Montreal went on one-day strike last week and vowedto stage another this Thursday, part of a now weeks-long overtime walkout. So far, not much of a headache is being caused for operators, but Chittagong is also suffering under an all-out truckers strike that hascreated logistic complications and delays.
Air Cargo Volumes from Asia Surge
Recent airfreight volumes out of Asia mark the start of peak season. China/North America rates leapt up last week to almost $7.00/kg – somewhat–3 more than the $5–6.00/kg the majority of the year averaged. Rates to Europe have also climbed, reaching $3.86/ kg, a 12 per cent increase over September, but no steep uptrend yet).
Freightos Baltic Index
- Asia-US West Coast prices (FBX01 Weekly) increased 5% to $5,540/FEU.
- Asia-US East Coast prices (FBX03 Weekly) fell 13% to $5,165/FEU.
- Asia-N. Europe prices (FBX11 Weekly) fell 1% to $3,489/FEU.
- Asia-Mediterranean prices (FBX13 Weekly) fell 12% to $3,451/FEU.
Air rates – Freightos Air Index
- China – N. America weekly prices increased 28% to $6.94/kg
- China – N. Europe weekly prices increased 1% to $3.86/kg.
- N. Europe – N. America weekly prices increased 9% to $2.02/kg.
Analysis
Asia-Europe ocean rates closed October at 30% off the month of September largely due to early peak season diverts around the Cape of Good Hope and lulls that followed. However, some carriers have already issued blank sailings and will continue to do so with demandremaining weak, although the Lunar New Year might arrive early thisyear with its late January timing.
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Source: AJOT
