Peak season container volumes pushed the Freightos Baltic Global Container Index (FBX) up 15% this month, to a new FBX-high of $2,240/FEU.

Still-surging demand, driven in part by the lead up to Golden Week, kept ships overbooked and ocean rates climbing on China-US lanes to start the month, as rates to the East Coast climbed 15% to nearly $4,500/FEU by September 15th.

 

By mid-month, prices had climbed almost uninterrupted since June, with West Coast rates more than doubling since the end of May and reaching 160% higher than last year. The continued rise prompted China’s Ministry of Transport to call a meeting with the major ocean carriers to try and stabilize prices.

 

They reportedly requested that carriers cancel their planned mid-month General Rate Increases (GRIs) in order to stop the current climb and restore any blanked sailings planned for Q4 to ease supply constraints and ensure that when demand eventually decreased, rates would fall along with it.

 

Chinese state-owned carriers cancelled GRIs and restored blankings, and some others reduced GRIs and added some future capacity. But even with this intervention and the US Federal Maritime Commission’s promise of additional scrutiny of carrier behavior, peak season demand was strong enough to keep rates climbing to new multi-year highs.

 

Though these warnings may have slowed the speed of the climb, West Coast rates still increased another 5% in the second half of the month (16% since the end of August) to $3,885/FEU, 187% higher than last year's rate. And full ships and severe equipment shortages also had many shippers paying additional fees to guarantee space and containers.

 

With estimations that volumes will stay strong through October or even the end of the year, the added capacity may not be enough to bring rates down just yet. Whatever the outcome of these governmental moves, the consideration of interventions shows just how extreme the last few months have been for China-US freight.

 

The equipment shortage due to the transpacific surge is also being felt on Asia-Europe lanes, where a combination of strong volumes and some continued capacity management had rates climbing significantly this month as well.  In addition, equipment being diverted to more lucrative lanes may be triggered slow-downs on intra-Asia lanes.

September Asia-North Europe volumes were estimated to be on par or slightly above last year’s demand. These volumes pushed rates up 29% this month to $2,199/FEU, surpassing January’s highs and closing 73% higher than this time last year. 

 

About Judah Levine, Research Lead, Freightos

Judah is an experienced market research manager, using data-driven analytics to deliver market-based insights. Judah produces the Freightos Group's FBX Weekly Freight Update and other research on what's happening in the industry from shipper behaviors to the latest in logistics technology and digitization.