[Freightos Weekly Update] Asia - US West Coast rates dip below 2019 levels

Key insights:

1. As congress voted to block a major rail strike, the big unwind in ocean logistics continued last week unimpeded.
1. Asia - US West Coast rates fell by more than 25% last week to a level 5% lower than in 2019. Asia - US East Coast rates fell 19% but are still 32% higher than three years ago. Easing fuel prices are also removing some pressure on container rates.
2. Transatlantic prices have decreased by nearly 25% since August – likely a result of carriers shifting capacity to this lane where demand has remained stable and rates are highest at more than $6,000/FEU.
2. Air cargo peak season has now officially failed to materialize. Freightos Air Index rates from China to N. America and Europe are down more than 40% compared to the end of November a year ago

Ocean rates:

• Asia-US West Coast prices (FBX01 Weekly) fell 26% to $1,426/FEU. This rate is 90% lower than the same time last year.
• Asia-US East Coast prices (FBX03 Weekly) decreased 19% to $3,723/FEU, and are 78% lower than rates for this week last year.

• Asia-N. Europe prices (FBX11 Weekly) fell 2% to $3,974/FEU, and are 73% lower than rates for this week last year.

Analysis

As the US congress voted to block a major rail strike, the big unwind in ocean logistics continued last week unimpeded.

Transpacific ocean rates fell sharply again last week on easing demand and congestion. As empty containers accumulate at Chinese ports, Asia - US West Coast rates fell by more than 25% last week to a level 5% lower than in 2019. Asia - US East Coast rates fell 19% but – with West Coast volumes and some congestion shifting east – are still 32% higher than three years ago. Easing fuel prices are also removing some pressure on container rates.

Transatlantic prices dipped slightly last week and have decreased by nearly 25% since August – likely a result of carriers shifting now excess capacity to this lane where demand has remained stable and rates are highest at more than $6,000/FEU. As congestion eases, though, some observers expect these rates to fall significantly as well.

With inflation and inventory build ups subduing demand for air imports too, air cargo peak season has now officially failed to materialize. Freightos Air Index rates from China to N. America and Europe of $5.49/kg and $4.64/kg, respectively, are down more than 40% compared to the end of November a year ago.