FBX Index April: Market Summary
The Freightos Baltic Global index fell 7% to $8,747/FEU this month, driven by the slowdown of available exports out of China due to COVID lockdowns in Shanghai. This rate is still double its level a year ago and nearly six times the pre-pandemic norm.
As the lockdown in Shanghai stretched through the month of April, the availability of exports continued to drop as factories remained closed and trucking capacity to move manufacturing inputs to factories and exports to the ports remained scarce.
These factors have led to a significant decrease in export volumes out of Shanghai since the lockdown began and a two-day wait for arriving vessels. Many shippers are diverting exports to Ningbo where export volumes climbed along with congestion.
Although some carriers are omitting Shanghai port calls or canceling some upcoming services, with the ports still open most ships continued to arrive. Together with the decrease in available exports, this trend is one factor – possibly along with seasonality and inflation – in the decrease in ocean rates since the lockdown.
Asia - N. America West Coast rates fell 11% since the end of March to $14,065/FEU and East Coast prices fell 3% to $17,148/FEU, both more than twice their levels a year ago. Asia - N. Europe rates fell 10% since last month to $10,829/FEU and have decreased 25% since the start of the year.
Asia - N. America West Coast rates fell 11% since the end of March to $14,065/FEU and East Coast prices fell 3% to $17,148/FEU, both more than twice their levels a year ago.
Asia - N. Europe rates fell 10% since last month to $10,829/FEU and have decreased 25% since the start of the year.
Expectations are that Shanghai will reopen by mid-May at the earliest. The rebound will cause a surge in ocean volumes that will certainly increase congestion, delays and ocean rates. But there is reason to expect that the resulting disruptions won’t be as extreme as some we’ve seen in the last two years.
Diverted shipments and empty container shortages were major factors in the extent to which previous lockdowns in China disrupted ocean logistics. But with ports operational throughout - and most vessels still making Shanghai port calls this month - imports needed for manufacturing and empty containers needed for exports will already be in place. This could speed up the recovery and mitigate some of the knock-on effects when the lockdown is lifted.
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.
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