Air Freight News

[FBX Weekly] Ocean rates may have hit their ceiling as air rates climb

Apr 27, 2021

Key insights:

  1. Despite continued delays and disruptions, Asia-Europe ocean rates – along with those on all major trade lanes – were level this week, possibly suggesting the industry has reached its ceiling for spot rates.
  2. But demand is not easing for ocean freight anytime soon, and is growing for air cargo, where Asia-US rates have climbed about 25% to most destinations so far this month. 

China-US rates:

  • China-US West Coast prices (FBX01 Daily) were unchanged at $4,854/FEU. This rate is 225% higher than the same time last year.
  • China-US East Coast prices (FBX03 Daily) were also level at $6,203/FEU, and are 135% higher than rates for this week last year.

  • Analysis

Ports, carriers, forwarders and shippers continue to contend with the fallout from the Suez blockage, with delayed ships leading to additional cancelled Asia-Europe and Europe-US sailings announced for the coming weeks. 

Though many shippers will pay well above spot rates to actually secure a booking given current conditions, one positive indication that the worst of the latest crisis may be behind us is the levelling off of ocean rates across all major lanes this week, with the FBX Global Index going unchanged after more than a month of week-on-week increases.  

Reports that US consumer spending on services has finally started to grow offer a first sign that goods-driven demand for ocean freight will eventually ease.  But not very soon, as May is expected to be another extremely busy month on the transpacific and depleted inventories will mean elevated ocean volumes even after consumer demand eventually shifts back to services. 

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