Judah Levine: Current Market Summary
The Freightos Baltic Global Container Index (FBX) was level this month, but still very elevated at a rate of $2,230/FEU, a 79% increase annually.
China-US ocean rates likewise stayed level - but extremely high - after climbing nearly uninterrupted from June into September. Prices from China to US West Coast ports were at the $3,850/FEU mark. They have increased 133% since the end of May and nearly tripled year on year, with East Coast lanes now at $4,680, up 87% annually.
October’s transpacific volumes were strong enough to keep ships overbooked and equipment scarce, but September’s pressure from China’s Ministry of Transport and the US Federal Maritime Commission may have made carriers hesitant to introduce planned rate increases even when shipper demand was there.
Still-strong volumes are keeping rates elevated even as carriers are adding as much capacity as possible to meet the demand and benefit from the pricing. Idle fleet levels have dropped all the way to 2.2% of total capacity, and blanked sailings on the transpacific have been minimal.
In the US, Amazon’s (late) mid-month Prime Day kicked off this early holiday shopping season, as some major retailers have already started promotions designed to reduce the strain on parcel delivery and limit in-store crowds.
Most estimates expect peak season demand to extend through November, while others see low inventory levels which retailers had let run down over the course of this very uncertain year driving a major restocking cycle that could keep volumes strong and rates high even through to Chinese New Year in February.
An estimated 10% of capacity was still blanked from Asia to Europe in September, which combined with rising demand to push rates up nearly 30% from August to September to about $2,200/FEU.
On Asia-North Europe lanes, strong volumes that began in August have continued to grow and have kept rates elevated. An estimated 10% of capacity was still blanked from Asia to Europe in September, which combined with rising demand to push rates up nearly 30% from August to September to about $2,200/FEU.
In October though, even with some blanked capacity over Golden Week, capacity has increased 14% annually while rates declined less than 4% to $2,120/FEU, 89% higher than the same time last year. With capacity restored, these elevated rates are now solidly demand-driven, with estimates that volumes will remain strong in Q4.
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.