[Freightos Weekly Update] Transatlantic rates still elevated as other lanes level off

Key insights:

1 Ex-Asia ocean rates were level this week – with transpacific prices well below 2019 levels – as carriers continue to take steps to reduce capacity and potentially put upward pressure on prices.

2 Meanwhile, on the transatlantic, strong demand has kept ocean volumes and rates elevated. Transatlantic container prices are 19% lower than a year ago but still nearly 4X their level in January 2019. This week CMA CGM even rolled out a Peak Season Surcharge on containers shipped to the US from Europe.

3 Reports of workers causing small-scale disruptions at West Coast ports are the latest development in labor negotiations that have been stalled for months and continue to push volumes to the East Coast and Gulf.

Ocean rates:

• Asia-US West Coast prices (FBX01 Weekly) were unchanged at $1,325/FEU. This rate is 91% lower than the same time last year.

• Asia-US East Coast prices (FBX03 Weekly) increased 1% to $2,641/FEU, and are %84 lower than rates for this week last year.

• Asia-N. Europe prices (FBX11 Weekly) were level at $3,420/FEU, and are 77% lower than rates for this week last year.

Analysis

Transpacific ocean rates to the US West Coast were level this week and well below January 2019 levels alongside new reports of slowing US consumer spending on goods.

Import volumes handled by East Coast ports remain higher than in 2019 due to the eastward shift of containers that began last year to avoid potential West Coast port labor disruptions – with new reports of small-scale actions by union members in the last few weeks. But despite relatively strong volumes, Asia - US East Coast rates are well below 2019 levels too.

Asia - N. Europe prices were stable this week as well. And while there are first signs of an economic rebound in Europe, import demand remains subdued.

In response to falling volumes, carriers are continuing to cancel sailings out of Asia and are taking other steps like slowing vessel speeds and taking longer routes to try and bring capacity down to the current levels of demand. They are also expected to increase the number of older ships that will be scrapped this year. But projections that 2023 ex-Asia volume totals will only be slightly below 2022 imply expectations for a rebound in demand later this year.

Transatlantic trade, though, remains an anomaly.

N. Europe - US East Coast rates ticked up 10% this week and – despite being 19% lower than a year ago – at $5,222/FEU are still nearly 4X their level in 2019. Demand did begin to ease in November, but volumes were still 20% higher than in 2019.

And as opposed to ex-Asia lanes where blanked sailings are climbing, carriers have continued to add capacity to this lane. CMA CGM even announced a Peak Season Surcharge for transatlantic volumes this week, indicating that demand has remained strong into 2023.