Report Highlights
Transpacific pricing usually picks up mid-December as importers look to replenish after Christmas. But, wary of trade tariff increases, many importers are already overstocked. So, it wasn’t surprising that the mid-December General Rate Increases (GRIs) were cancelled. Prices have dropped by just over $100 on each lane ($102 to the West Coast, $109 to the East Coast).
The US-China trade war
“The US-China trade war, not seasonality, is currently driving transpacific prices. I don’t envy procurement managers right now. Should they be using this time to make some hard sourcing decisions? Changing suppliers is always fraught with risk, let alone moving production to another country.”
“The rate volatility will likely increase at least until Chinese New Year. With the uncertainty in tariffs, companies with agile supply chains have already prepared to move production to other locations and may now play with the timing. Those with less flexibility in sourcing will play with stock levels. Carriers, who don’t have the capacity to react to sudden changes in demand, are now worried that if the tariff trade war escalates again, that they will be facing surplus capacity and plunging prices.”– Philip von Mecklenburg-Blumenthal, VP of FBX, Freightos.
This week’s report
| Week 50 | Week 49 | Last year* | |
| Global | $1,530 | -2% | 46% |
| China – US West Coast | $2,005 | -5% | 101% |
| China – US East Coast | $3,274 | -3% | 96% |
| China – North Europe | $1,486 | 0% | -1% |
| North Europe – US East Coast | $1,845 | 1% | 64% |
| * Compared to the corresponding week in 2017 | |||
Pre and Post Christmas pricing
Transpacific pricing usually dips from a mid-November peak (pre-Christmas) to mid-December (when post-Christmas replenishment begins). But, with importers stocking up in advance of the (since postponed) increase in trade tariffs, it wasn’t surprising that this year bucked the trend. The mid-December GRIs were cancelled and prices dropped by just over $100 on each lane ($102 to the West Coast, $109 to the East Coast).
Although transpacific ocean freight prices have eased recently, they are still twice the price of this time last year. And they should generally hold through January as importers (many of whom are currently over-stocked) replenish after the Christmas sales.
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Source: BalticBriefing
