FBX weekly rates level off, though carriers expecting a healthier July

Key insights:

1    China-US ocean rates levelled off this week after a month-long tear, as carriers blanked fewer sailings and restored some of the cancellations. However,July GRIs point to expectations of improved volumes for the near term.
2    The increase in rates to the West Coast could show that importers are eager to get goods as soon as possible: before tariff exemptions expire in August and before demand possibly dips again.
3    This week’s inaugural Freightos Logistics Panel survey found uncertainty too: Even among the hopefuls that are expecting a peak season this year (65%), most (40%) think it will be subdued.
China-US rates:
•    China-US West Coast prices (FBX01 Daily) went unchanged since last week at $2602/FEU. This rate is 61% higher than the same time last year.
•    China-US East Coast prices (FBX03 Daily) rose 2% since last week, reaching $3343/FEU, and are 23% higher than rates for this week last year.
Analysis
Ocean rates from China to the US hit the brakes on their month-long spike this week, leveling off completely to the US West Coast, and increasing 3% to the Est Coast.
This stability could indicate we’ve reached the peak of the demand bump, though improvements in capacity are also playing a part:
Carriers announced very few cancellations for July and August. Hapag-Lloyd even reinstated five sailings to the US West Coast and Pacific Northwest in July.
But even with more capacity available in July, reports of planned rate increases or even early Peak Season Surcharges to start this month suggest carriers are expecting volumes to keep improving.
Better than expected consumer spending in May likely pushed importers to get busy in June. And while we haven’t talked much about tariffs recently, the looming August expiration date on some of the US tariff exemptions for Chinese goods may be driving orders too.
The June trend away from PPE was apparent from SMB shipments on the Freightos.com marketplace as well: less than 4% of June orders were PPE-related, compared to 7% in May.
Despite the June bump and carrier moves for July and August, there’s no telling if the rebound will be sustained.
The dramatic spike in rates, together with other signs of improved volumes to West Coast ports may show that importers are looking to get their shipments as quickly as possible. This urgency could show that businesses are eager to get these goods now, before consumer behavior changes.
The results of our first Freightos Logistics Panel survey across a range of logistics stakeholders reflects this uncertainty about the coming months: Even among the hopefuls that are expecting a peak season this year (65%), most (40%) think it will be subdued compared to most years.