Weekly highlights
Ocean rates – Freightos Baltic Index
Asia-US West Coast prices (FBX01 Weekly) increased 22% to $2,096/FEU.
Asia-US East Coast prices (FBX03 Weekly) increased 2% to $2,930/FEU.
Asia-N. Europe prices (FBX11 Weekly) stayed level at $2,464/FEU.
Asia-Mediterranean prices (FBX13 Weekly) increased 15% to $3,367/FEU.
Air rates – Freightos Air index
China – N. America weekly prices increased 18% to $7.63/kg.
China – N. Europe weekly prices decreased 12% to $3.64/kg.
N. Europe – N. America weekly prices increased 2% to $2.48/kg.
Analysis
The past week has offered more signs of encouragement for a container market return to the Red Sea. In addition to the Houthis’ release of crew members held in Yemen since a vessel attack in July, CMA CGM and its Ocean Alliance announced some of their services – escorted by French naval vessels – will now transit the Suez Canal for all backhaul voyages, with another also sailing headhaul via the Red Sea.
None of these developments make a Red Sea rebound imminent however, and a full return could still be quite a ways off. But the eventual return of container traffic to the Red Sea will ultimately release a surge of capacity back into a market already struggling with oversupply.
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Transpacific container rates to the West Coast hit a low for the year of about $1,400/FEU in early October. Since then, carriers have sought to reduce capacity and introduce GRIs, resulting in a (relatively slow-moving) rollercoaster for prices on these lanes as supply-driven rates rise, retreat and repeat.
Carriers were able to push West Coast rates up in mid-October and again to start November, resulting in an early-November climb to about $3,000/FEU only to see prices fall to $1,700/FEU by the end of the month.
But prices ticked up again to start December – despite volumes projected to be the lowest of the year – with rates to the West Coast up 22% last week to $2,100/FEU. Some carriers are introducing smaller, incremental increases on a weekly basis as opposed to the more typical bi-monthly GRIs in the hopes that the market will accept smaller price bumps more easily than sharper increases. This trend may be reflected in daily rates for this week up another $100/FEU to $2,200/FEU to the West Coast and to more than $3,000/FEU to the East Coast, though once again this month there is skepticism that these prices will hold.
Despite some observers expecting the US market to enter a restocking cycle that would spur ocean volume growth next year, others are less optimistic. The NRF anticipates retailer expectations for negative trade war impacts on consumer behavior will result in double-digit percentage year on year ocean import volume declines through April of next year, with demand lower than 2024 levels as well.
Trade war frontloading is partly to blame for lower US ocean import volumes now, and for the sharply negative year on year comparisons for those expecting weak volumes for Q1 2026. Europe’s ocean imports meanwhile – especially as China has shifted focus away from the US and toward other markets including Europe – have been stronger and more consistent than N. America’s. CTS data shows total ocean imports to Europe eased 2% in month-on-month October, but were still 1% higher than a year ago. Asia – Europe volumes fell 3% year over year in October for the first annual decrease since February.
Despite easing, slow-season volumes, carriers have had more success propping up Asia-Europe rates in Q4 than they have on the transpacific partly due to more aggressive blanked sailings as these lanes enter the home stretch of their annual ocean contract negotiation period.
GRIs starting mid-October have pushed Asia – Europe rates up 40% to $2,463/FEU through last week, though prices have been level since late November. Asia – Mediterranean rates are up 56% to $3,366/FEU including a $500/FEU bump to start December. Some carriers have announced additional GRIs for mid-December, aiming to push N. Europe rates to $3,500/FEU and Mediterranean prices to $4,200/FEU or higher.
As the air cargo market enters its final peak season weeks, Freightos Air Index data suggests transpacific demand strength. China – US rates climbed from around $5.30/kg in mid-October to $6.50/kg to close November, and are now pushing past the $7.50/kg mark – above last year’s $7.30/kg peak – during the end-of-season rush.
Demand is likely stronger on Asia – Europe lanes as China’s e-commerce export focus has also shifted to Europe. But the parallel shift of capacity away from the transpacific and to Asia-Europe lanes – also a factor in the current, higher transpacific rates – has kept Asia – Europe prices from spiking. China – Europe rates eased 12% to $3.64/kg last week and are about on par with a year ago.
The EU and the UK have announced plans to close their de minimis exemptions within the next few years, with several countries planning handling fees for low value imports even before the rule change. US de minimis closures initially led to a sharp decrease in China-US e-comm air cargo volumes. And though volumes remain below April levels, some reports show much of that e-comm demand has returned to the China-US air market as e-commerce platforms have adapted to the new rules.
