News
The latest composite Freightos Baltic Index (FBX) has quoted $3,704 per FEU, up 9% from a week earlier, Freightos announced on Tuesday. From a year earlier, however, the index fell 8.6%.
The individual indices for Asia-North America west coast containers (FBX01 Weekly) grew 9% to $5,994 per FEU; for Asia-North America east coast containers (FBX03 Weekly), 11% to $7,099 per FEU; for Asia-North Europe containers (FBX11 Weekly), 6% to $2,925 per FEU; and for Asia-Mediterranean containers (FBX13 Weekly), 13% to $4,846 per FEU.
The FBX, a daily freight container index issued by Freightos and the Baltic Exchange, measures global container freight rates by calculating spot rates for 40-foot containers on 12 global trade lanes.
As for the Freightos Air Index (FAX), meanwhile, China-North America weekly prices went down 5% to $5.29 per kilogram; China-North Europe prices, up 2% to $3.81 per kilogram; and North Europe-North America prices, down 1% to $1.85 per kilogram.
U.S. shippers have been frontloading peak season goods since the May 12 China-U.S. de-escalation in anticipation that tariffs could climb again in August. Until a deal is actually signed, the early peak season rush is likely to continue, with the most recent National Retail Federation (NRF) container volume forecast suggesting that the strongest post-May 12 period of demand may already be ending.
If a China-U.S. deal does materialize soon–and shippers are convinced it will stick–some reductions in urgency and further easing in demand could be seen as, stuck with 30% tariffs, shippers spread out volumes across the more typical peak season months into October. But that arrivals in this year’s peak season peak month of July are expected to be lower than in April suggests that some of the frontloading to date will come at the expense of volume strength for the rest of the year, deal or no deal.
As such, there are indications that trans-Pacific container spot rates may have already peaked, too, meaning market conditions will not be there to support carriers’ announced June 15 and July 1 general rate increases (GRIs).
Despite sharp climbs in the previous week, the latest FBX daily trans-Pacific spot rates to the west coast of North America are already 3% lower than the previous week’s average. And if mid-month GRIs are abandoned or prove unsuccessful, easing rates may reflect both some decrease in demand relative to volumes since the mid-May rebound, and the recent increase in capacity on these lanes.
Carriers rushed to reinstate the trans-Pacific sailing and services they suspended during the April-May lull–much of which have by now returned to the lane. Anticipation of a surge in demand–and freight rates–ahead of the August deadline also drove many alliance carriers to schedule additional sailings and once again attracted regional carriers to the lane. But this combined capacity bump may have overshot current demand levels, with reports of canceled ad hoc sailings and vessels departing half full supporting this hypothesis and the possibility that rates are likely to ease.
Some of the capacity additions to the trans-Pacific came via capacity subtractions from other lanes, including that from Asia to Europe. Together with capacity reductions and port congestion–though delays are easing–the start of Asia-Europe peak season demand may be supporting spot rates that are up 24% so far in June to about $3,000 per FEU, and rates could climb further on mid-month GRIs.
Prices of $4,846 per FEU from Asia to the Mediterranean last week were up almost 50% compared to the end of May. Daily rates so far this week though are down to about $4,500 per FEU and may reflect reports of overcapacity on the Asia-Mediterranean trade.
