More disruptions due to COVID outbreaks and a possible early summit in this year’s peak season kept ocean rates extremely high though mostly level in August, with the Freightos Baltic Global index ending the month at $10,321/FEU. That is only a 1% monthly increase, but 430% higher than a year ago and nearly eight times the pre-pandemic norm.

A Ningbo port worker testing positive for COVID-19 set off fears of a repeat of the outbreak in Yantian, which caused significant regional delays and put pressure on rates. Though the slowdown at Ningbo did create a backlog and sent ships to alternate regional ports, the disruption was not as severe as it could have been. 

Many US importers with low inventories and concerns about getting holiday season orders on time are shipping at peak season volumes earlier than usual.

Ningbo’s relatively mild impact was a modicum of good news for an already overloaded ocean freight ecosystem. Many US importers with low inventories and concerns about getting holiday season orders on time are shipping at peak season volumes earlier than usual. Congestion at the ports of LA and Long Beach has never completely subsided this year. But this latest push has led to a new surge of arriving ships and a record number of vessels waiting for days off the coast.  

Although volumes and delays may have increased this month, transpacific container rates stayed level - albeit still extremely high. Asia-US West Coast rates were unchanged compared to the end of July at $18,425/FEU, still a 452% increase compared to a year ago, and 325% higher than at the start of the year. Asia-US East Coast rates climbed just 1% to $20,057/FEU, 415% higher than last year. 

Congestion at key European ports likewise caused delays and kept precious capacity waiting at ports. However, Asia-North Europe prices increased only 1% to $13,858/FEU, more than eight times a year ago.

Congestion at key European ports likewise caused delays and kept precious capacity waiting at ports. However, Asia-North Europe prices increased only 1% to $13,858/FEU, more than eight times a year ago. Asia-Mediterranean rates climbed 8% to a new high of $12,906/FEU, 596% higher than last August. 

Given the lack of significant price volatility this month - and despite the extreme demand, capacity shortage and other disruptions – it is tempting to suggest that container rates may have reached their ceiling at the end of July. But in such unprecedented times, and with rates climbing for more than a year, it may be wiser to keep our predictions to ourselves.

 

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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