The Freightos Baltic Global index fell 13% to $7,622/FEU this month as Covid disruptions in Shanghai led to a significant decrease in export volumes. Although this rate is 26% above its level a year ago – a modest increase by the standard of the past 12 months – it is still more than five times the pre-pandemic norm. 

Despite significant removal of capacity in the form of blanked sailings this month, the resulting drop in available exports and demand for ex-China freight led to a significant decrease in transpacific spot rates.

The lockdown in Shanghai has now hampered the trucking and manufacturing industries that service the world’s largest port for more than two months. Despite significant removal of capacity in the form of blanked sailings this month, the resulting drop in available exports and demand for ex-China freight led to a significant decrease in transpacific spot rates.

Asia - N. America West Coast rates fell more than 30% in May to $10,762/FEU and East Coast prices fell 20% to $13,796/FEU, both more than 35% higher than a year ago, but down to levels not seen since last summer.

Blank sailings seem to have kept Asia - North Europe prices level in May. Rates fell just 2% to $10,579/FEU since the end of April – only 6% higher than a year ago – although they have decreased a total of 12% since the start of the lockdown at the end of March.

However, Asia - Europe rates had already been falling for much of the year prior to the outbreak in Shanghai: since the Lunar New Year in February until just before the shutdown in late March, Asia - Europe rates decreased 18% or nearly $3,000/FEU. 

This drop suggests more seasonal demand trends among European importers or more pronounced effects of inflation on consumer spending in Europe – or both – when compared to the sustained transpacific rate levels prior to this month.

Strong demand, as well as congestion at both European origins and US East Coast destination ports, have led to an 18% increase in transatlantic rates since the start of the year. North Europe - US East Coast rates ended the month at $8,395/FEU: a new FBX high on this lane. 

Part of the congestion is due to some US importers switching from West Coast to East Coast ports to avoid congestion at LA/Long Beach. Many shippers are also pulling peak season orders forward, not only to get ahead of delays experienced last summer and early fall but also to avoid possible West Coast labor disruptions in July.

Part of the congestion is due to some US importers switching from West Coast to East Coast ports to avoid congestion at LA/Long Beach. Many shippers are also pulling peak season orders forward, not only to get ahead of delays experienced last summer and early fall but also to avoid possible West Coast labor disruptions in July.

With Shanghai set to begin reopening in June, it is possible a surge of pent-up demand will combine with these other trends to put renewed pressure on operations and freight rates. The size of the new wave of imports and the extent to which steps taken to reduce congestion at the container yards are effective will determine the degree of the disruption and the impact on container prices. 

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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