July 2024 Market Summary: Freightos Baltic Global Index


The Freightos Baltic Global Index (FBX) saw a significant spike in June 2024, increasing by 30% month on month to $4,446 per FEU. This surge, surpassing the February peak by 30%, is driven by an early start to peak season and worsening congestion in the Red Sea, pushing rates to their highest levels since mid-2022. Overall, the global benchmark is now 238% higher than in 2019.

Transpacific Trade Dynamics

  • Early Demand Increases: Started in May, driven by tariff increases on Chinese goods in August and efforts to avoid Red Sea-related delays, which could affect Q4 inventory availability.
  • Labour Strike Concerns: Possible East Coast and Gulf port labor strike in October adds to the urgency for shippers.

Asia-Europe Trade Trends

  • Peak Season Goods: Volume increases in May and June already included peak season goods, with July tariffs on Chinese electric vehicle imports possibly driving demand.
  • Carrier Strategies: Heavy reliance on transshipment to maintain schedule reliability while diverting from the Red Sea has led to congestion at ports like Singapore and Barcelona, as well as vessel bunching at major ports in China.

Freight Rate Increases

  • Asia to North America West Coast: Rates rose 39% month on month to $6,840 per FEU, 40% higher than the February peak, and nearly five times higher than in 2019.
  • Asia to North America East Coast: Rates rose 28% to $8,113 per FEU, 20% higher than in February and 206% higher than in June 2019.
  • Asia to North Europe: Rates increased by 44% month on month to $7,001 per FEU, 27% higher than their January peak and 447% higher than 2019 levels.
  • Asia to the Mediterranean: Prices rose 27% month on month to $7,169 per FEU, 6% higher than in January and 308% higher than in 2019.

Future Rate Projections

  • Peak Season Demand: With transpacific demand projected to peak in August, rates are expected to continue climbing. Additional surcharge hikes and General Rate Increases announced for July could push rate levels up to about $10,000 per FEU on some lanes.
  • Tariff-Driven Volume Decline: As tariff-driven volumes likely decline in the coming months, demand pressure could ease earlier than usual. When demand does ease, rates are expected to fall but remain above the floor reached in March and April (about double 2019 levels) as long as Red Sea diversions continue.

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Source: Baltic Exchange