Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) decreased 1%.   

Asia-US East Coast prices (FBX03 Weekly) decreased 1%.

Asia-N. Europe prices (FBX11 Weekly) decreased 2%.

Asia-Mediterranean prices(FBX13 Weekly) increased 3%.

Air rates – Freightos Air Index

China – N. America weekly prices increased 1%.

China – N. Europe weekly prices decreased 1%.

N. Europe – N. America weekly prices decreased 1%.

Analysis

Tensions remain high in the Middle East, with President Trump stating the US has held off an attack on Iran planned for this week to allow for continued negotiations, and the Strait of Hormuz remaining closed.

For container freight, as peak season approaches, the continued closure means we’ll start to see seasonal demand-driven movements in freight rates from a fuel cost-elevated baseline – with some capacity management of the growing fleet playing a role as well. 

Asia – Europe container rates for the most stayed level since the start of the war, though additional fuel costs likely prevented prices from easing during the low demand months of March and April. 

Peak season demand on Asia – Europe lanes under “normal” circumstances can start as late as July and run through mid-October. But since carriers started diverting away from the Red Sea, importers in Europe have started peak season ordering earlier in order to finish moving goods before Golden Week at the start of October – since the longer transit time means containers moved after mid-October may not arrive in time for the holiday season. 

In 2024, Asia – Europe rates had already started climbing in early May and peaked by mid-July. In 2025, possibly after observing the May 2024 start was earlier than necessary, Asia – Europe prices picked up in early June and again peaked in mid-July, with a $1,200/FEU increase in that span to N. Europe and a short-lived $2,000/FEU peak for rates on the Asia – Mediterranean lanes.  

Some carriers are reporting an early uptick in demand on these routes again this year, and though prices were about level last week at $2,800/FEU to N. Europe and $3,600/FEU to the Mediterranean, daily prices have started to pick up so far this week, possibly reflecting mid-May GRI attempts. Rates could start climbing on those increased volumes, though they would also be helped by current blanked sailings on these lanes.  Additional rate increases announced by some carriers for June aim to push rates up by about $2k/FEU compared to current levels, though many observers are skeptical that prices will climb to that extent.

Transpacific rates have climbed about $1k/FEU since the start of the war and are likely to climb further once peak season demand kicks in. Prices were about level last week at $2,800/FEU to the West Coast and $4,300/FEU to the East Coast though daily rates so far are climbing on these lanes too from mid-month price hikes. 

It is possible, though less likely, that transpacific peak season is also starting already – last year can’t be used as an indication because of the tariff-driven frontloading and start and stops –  though the NRF projects peak season increases will start arriving in July, so demand could start picking up soon if it hasn’t just yet. If there is no demand bump yet, it will remain to be seen if carriers have removed enough capacity to support the current price increases until volumes pick up. 

In trade war developments, announcements since last week’s Trump-Xi summit suggest the meeting did have a stabilizing effect on trade, with China reducing some barriers to US exports, and the two countries agreeing to establish bi-lateral trade and investments boards to facilitate the trade relationship. The EU is taking steps to finalize the trade deal it agreed to with the US last year ahead of a July deadline set by the White House.

In air cargo, the sharp March drop in Middle East cargo traffic recovered somewhat in April and is likely continuing to rebound in May, though it is still below pre-war levels. Capacity improvements by the Gulf carriers are powering the rebound in demand, as Asia – Europe volumes that normally transited via the Gulf diverted to other Asia – Europe lanes to start the war, with some now likely shifting back as services are restored. 

Despite the capacity additions, the demand rebound is likely stronger than the capacity bump for some lanes, and account for the divergence of some air cargo rates to the Middle East from prices on other east-west lanes. 

Freightos Air Index data show that while rates from China, South Asia and SEA to Europe remain at least 50% higher than before the war, prices on these lanes have mostly plateaued or passed their peak in the last few weeks. SEA – Middle East rates meanwhile reached a new high of more than $4.75/kg last week and are climbing so far this week, with S. Asia – ME prices above $4.00/kg, compared to about $2.70/kg a month ago. 

Low-value air cargo imports to France dropped sharply since March as France chose to implement the EU’s €2/parcel fee aimed at curbing e-commerce imports before the July date set for the rest of the member states. The fee has likely pushed those volumes to neighboring countries to avoid the added costs. 

The widespread fee in July will likely lead to some reduction in overall e-commerce imports to the EU. But the drop may not be as significant as that seen since the US cancelled its de minimis exemption a year ago as the fee may represent a lower cost than US tariffs and customs fees. While the US change has led to a significant drop in US-bound air cargo e-commerce, volumes remain a significant contributor to US air cargo import demand.