Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) fell 6% to $2,793/FEU.   

Asia-US East Coast prices (FBX03 Weekly) increased 6% to $3,734/FEU.

Asia-N. Europe prices (FBX11 Weekly) decreased 1% to $2,480/FEU.

Asia-Mediterranean prices (FBX13 Weekly) were level at $2,827/FEU.

Air rates – Freightos Air index

China – N. America weekly prices increased 5% to $6.60/kg.

China – N. Europe weekly prices increased 2% to $4.01/kg. 

N. Europe – N. America weekly prices increased 6% to $2.31/kg.

Analysis

The Trump administration – with the Supreme Court decision on the validity of its many IEEPA-based tariffs looming – announced additional tariff exemptions last week, focusing on agricultural products not produced in the US but also including beef, as the White House seeks ways to address cost of living concerns. The administration also announced frameworks for trade agreements with several South American countries and Switzerland. 

Since October, container carriers have been contending with downward pressure on rates from both the seasonal lull in demand and growing capacity on the major East-West trades. Nonetheless, driven by significant steps to reduce capacity, they succeeded in pushing through mid-October GRIs that rescued rates from two-year lows, and pushed prices up again with November 1st rate increases.

But as we pass November’s midway point, transpacific rates have started to decrease sharply.  Prices to the West Coast fell 6% last week, but daily rates so far this week have slipped more than 20% to about $2,100/FEU, erasing the November gains and, for now, back at about their mid-October GRI bump level. 

East Coast daily prices have also fallen by more than 20% so far this week to about $3,000/FEU, back to pre-October GRI levels. Some carriers have December GRIs planned, but they may reconsider given this week’s sharp retreat.

Asia – Europe and Mediterranean prices meanwhile, are proving stickier, with rates about level last week and into this week at $2,480/FEU and $2,827/FEU respectively. This stability may reflect more aggressive blanked sailing campaigns for these lanes during the current tendering season, with some carriers announcing additional GRIs to push prices up to the $3k – $4k/FEU level soon or to start December. 

In air cargo, the end of the US government shutdown has meant the restart of air operations that had been hampered by a drop in available air traffic controllers. The slowdown mostly impacted domestic cargo, and the ramp up is expected to take a few days.

The US’s cancellation of its de minimis exemptions this year was a significant driver of a sharp drop in air cargo volumes to the US – especially in the months immediately following the rule change – and a shift of Chinese e-commerce volumes to other markets, especially Europe.  The European Union voted last week to close its de minimis exemption by 2028, but will explore ways to collect duties on low-value goods as early as next year.

The shift in volumes has been accompanied by a shift in capacity, which has kept the air cargo spot market relatively stable and in line with seasonal demand changes. Freightos Air Index China – US rates increased 5% last week to $6.60/kg, up from less than $5.00/kg in early October and at its highest sustained level this year as peak season demand grows. Last year, rates hit a high of $7.30/kg in mid-December.

China – Europe prices increased 2% to $4.01/kg last week, up from about the $3.50/kg level held pre-Golden Week. Transatlantic rates increased 6% to $2.31/kg last week, up from $1.70/kg in mid-October and to its highest since March. Rates for this lane were at $2.60/kg a year ago.