The coronavirus outbreak at the Port of Yantian at the end of May meant that the industry – still coping with unrelenting demand and recovering from the Suez disruption - faced another major challenge.

This added pressure drove an 18% increase in the Freightos Baltic Global Container Index (FBX) this month to a new high of $6,221/FEU, an 84% increase since the start of the year as we close H1 2021.

Each successive disruption is having an outsized impact as the container market is working with no spare capacity to help mitigate new crises.

Reduced activity at Yantian for much of June meant more delays, more skipped port calls, and effectively less capacity just as peak season approaches. And each successive disruption is having an outsized impact as the container market is working with no spare capacity to help mitigate new crises.

The situation has also put additional pressure on rates, already kept elevated by non-stop demand.

On the Transpacific, rates climbed 30% since the end of May, with prices reaching $6,969/FEU to the West Coast and $9,781/FEU to the East Coast, after crossing the $10k/FEU mark and a new high mid-month. Both lanes have increased more than 80% since the start of the year after already doubling in H2 2020.

Rates from Asia to North Europe and the Mediterranean were not as volatile this month, increasing about 10% each to $10,921/FEU and $11,131/FEU, respectively, hitting new highs mid-month before declining slightly.  But prices on both lanes have now doubled since the start of the year, and are 5-6x their level a year ago.

As capacity gets diverted to the more congested lanes, transatlantic rates also increased: 40% to North America East Coast and 56% to South America West Coast, an about 3x increase on both lanes so far this year.

As capacity gets diverted to the more congested lanes, transatlantic rates also increased: 40% to North America East Coast and 56% to South America West Coast, an about 3x increase on both lanes so far this year.

As spot rates continue to climb, total costs for importers in the US and Europe to actually secure a spot container booking often includes thousands more in premiums.

Finally, though spending on services in the US has begun to rebound, indications are that available consumer savings, stimulus cash and low retail inventories will keep volumes and rates up well through peak season and likely until after Lunar New Year in February 2022 at the earliest.

 

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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