The Freightos Baltic Global index increased 14% month-over-month (MoM) in July to $5,073/FEU – with most of that climb taking place early in the month – surpassing the February peak by 47% and its 2019 level by more than 270% as peak season demand, combined with lingering congestion in some Asian hubs, pushed rates to new highs for the year.

However, stabilising or slightly easing rate levels from mid-month onwards – after more than two months of nearly uninterrupted increases – may indicate that the market has already reached peak rate levels for the year.

Congestion levels at major Asian container hubs like Singapore remain a factor but have eased significantly compared to the severe congestion seen in May. In addition, carriers adding more capacity to the main East-West lanes while demand and rates were high may also have eased some supply-side pressure.

Congestion levels at major Asian container hubs like Singapore remain a factor but have eased significantly compared to the severe congestion seen in May. In addition, carriers adding more capacity to the main East-West lanes while demand and rates were high may also have eased some supply-side pressure.

The biggest contributor to signs of easing rates may be the early start to peak season for North America and Europe.

Shippers moving goods earlier than usual – as they sought to avoid Red Sea-driven delays closer to the holidays, owing to longer lead times from diverted sailings moving Q4 goods, or move shipments before new tariff rollouts or ahead of potential labour disruptions for US East Coast shippers – may already be resulting in an early easing of peak season demand and the tight space and climbing spot rates that came with it.

Prices from Asia to the US West Coast closed July 8% higher than in June at $7,628/FEU. This is 58% higher than the February peak, but 6% lower than their mid-July high. Rates to the US East Coast rose 19% MoM to $9,824/FEU, but were about stable since the second week of the month.

Prices from Asia to the US West Coast closed July 8% higher than in June at $7,628/FEU. This is 58% higher than the February peak, but 6% lower than their mid-July high. Rates to the US East Coast rose 19% MoM to $9,824/FEU, but were about stable since the second week of the month.

Rates from Asia to North Europe rose 17% MoM in July to $8,369/FEU, surpassing their January peak by 53% and 2019 levels by 535%, but closed the month 3% lower than their early July levels. In the Mediterranean, prices increased 8% compared to the end of June to $7,796/FEU but after an early month increase were about level for the rest of July.

The anticipated rate decreases will be welcome news for shippers. However, as peak season goods will likely keep demand relatively high into September and congestion persists, a gradual decline is more likely than a rate collapse as demand eases. With ongoing Red Sea diversions, prices should not be expected to drop below levels seen during the demand lull in March and April, when rates were still about double 2019 levels.

For regions like the Middle East, South Asia, parts of Africa, and intra-Asian lanes, however, carriers continued to announce significant General Rate Increases and surcharge increases in July, largely as a result of congestion and capacity moving from these lanes to the major ex-Asia trades. Conditions should ease when peak season demand decreases and capacity is shifted back to lower volume and regional trades.

This month also saw an escalation in Houthi attacks on vessels in the Red Sea and on civilian targets in Israel, which led to Israeli retaliation for the first time. However, with most container carriers already avoiding the Red Sea, the impact on ocean freight was minimal. Disruptions due to the CrowdStrike update IT outage in July had minimal impact on ocean freight, although air freight was more significantly affected.

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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