[Freightos Weekly Update] Transpacific ocean rates tick up as LNY ends

Key insights:

1. Though cleared now, the blockade of the Ambassador Bridge caused trucking delays last week and pushed some urgent shipments to the air: the Freightos Air Index shows some Canada to Central US shippers paid more than $14/kg for air cargo, about 7X the norm.
2. Transpacific ocean rates ticked up as the Lunar New Year holiday comes to an end and manufacturing in China resumes.
1. Prices to the East Coast increased more sharply than West Coast rates, suggesting growing interest in East Coast ports as the West Coast continues to struggle with congestion.
2. Likewise, Asia-US ocean freight search data on Freightos.com show shipper interest in East Coast destination ports has grown by nearly 40% since October, accounting for almost 29% of all searches so far in February as the West Coast’s share has declined.

Asia-US rates:

• Asia-US West Coast prices (FBX01 Daily) increased 3% to $15,671/FEU. This rate is 175% higher than the same time last year.
• Asia-US East Coast prices (FBX03 Daily) climbed 8% to $17,931/FEU, and are 217% higher than rates for this week last year.

Analysis

Traffic once again flowed across the Ambassador Bridge linking Detroit and Windsor, Ontario on Monday. Demonstrators – including many truckers – had blockaded the bridge for much of last week to protest Canada’s COVID restrictions. The blockage caused trucking delays, diversions, and disruptions to auto manufacturing on both sides of the border. It also pushed some crucial shipments to the air, with the Freightos Air Index showing some Canada to Central US shippers paid more than $14/kg for air cargo, about 7X the norm. 

In ocean freight, transpacific rates increased, likely reflecting an increase in demand as the Lunar New Year holiday ends and manufacturing picks back up. Asia - US East Coast rates increased 7% compared to just 3% for West Coast prices, possibly indicating growing appetite for shipments to East Coast ports as congestion continues to plague LA/Long Beach.