The Freightos Baltic Global index spiked 43% month on month in May to $3,413/FEU – two-and-a-half-times higher than 2019 levels and just below the initial rate spike from Red Sea disruptions in February – as unseasonal increases in demand for ocean freight out of Asia, combined with a supply side increasingly stretched thin by Red Sea diversions. This strain has resulted in more instances of port congestion, increases in port omissions, delays and missed departures, and a decrease in empty equipment at export hubs over the last few weeks.

On the Transpacific, the increase in demand is likely the start of an early peak season as shippers pull forward volumes out of concern over East Coast labour disruptions or Red Sea-driven disruptions during the typical peak months, which could affect inventory availability during the retail peak expected in the fourth quarter.

Rates from Asia to North America West Coast rose 59% to $4,915/FEU month-on-month, back to about their February peak and nearly quadruple 2019 levels. US East Coast rates increased 48% to $6,297/FEU, 140% higher than in 2019 levels but still 7% lower than in February.

Demand increases from Asia to Northern Europe and the Mediterranean may reflect the start of a restocking cycle as many economies in Europe begin to recover. Prices from Asia to Northern Europe increased 45% in May to $4,882/FEU and are 256% higher than in 2019. Rates to the Mediterranean rose 32% month-on-month to $5,637/FEU, which are about 219% higher than 2019 levels, although both lanes remain below their peaks seen in the first quarter. 

Carrier announcements of additional rate increases set for June show they do not expect demand to ease or conditions to improve in the short term. Significant GRIs and Peak Season Surcharges, if market conditions persist, are likely to push rates past their highs seen in January and February when pre-Lunar New Year demand coincided with the start of the Red Sea diversions.

Shippers could face several months of very elevated rates and longer delays until peak season pressure ends – possibly earlier in the year than usual – at which point rates should ease but remain at least as high as their Red Sea-adjusted floors seen in March and April. 

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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