The Freightos Baltic Global Index decreased by 18% in September as Red Sea disruptions and a concern for a possible port worker strike at US East Coast and Gulf Coast ports led to an early easing to this year’s peak season. As Red Sea diversions continue to absorb significant capacity across the network, global rates remain three and half times higher than in 2019.

Anticipation of the ILA strike and concerns for Red Sea-related delays later in the year led to an early peak for Transpacific demand, with volumes surging to a near monthly record in August.

Although the National Retail Federation projects that arriving volumes will decrease 10% month on month in October, some rate buoyancy to the US West Coast may reflect a shift of volumes from the US East Coast to avoid labour disruptions in October.

With some decrease in demand and additional capacity entering the market, Asia - N. America West Coast rates of $6,816/FEU eased 4% by the end of September compared to August but are 16% below their high for the year reached in mid-July. Although the National Retail Federation projects that arriving volumes will decrease 10% month on month in October, some rate buoyancy to the US West Coast may reflect a shift of volumes from the US East Coast to avoid labour disruptions in October.

Transatlantic rates increased 18% in September to $1,918/FEU – a 60% increase compared to last September – on early-month surcharges, which may reflect the pressure on transatlantic shippers to receive containers before the 1 October strike deadline.

A US East Coast strike will strand most volumes at or heading to the impacted ports, as alternatives in Mexico and Canada are not equipped to handle significant diversions. The longer the strike lasts, the longer the unwind from the created backlog will take, with estimates that a weeklong strike could take three weeks or more to clear.

With US West Coast operations smooth even during the increase in volumes in August and lessons learned in the form of better warehouse capacity and efficiency, and near-dock container yards, US West Coast ports should be able to handle some increase in demand due to a strike on the East Coast. A prolonged strike would lead to increases from the already elevated US West Coast rate levels from the increase in demand and would likely eventually lead to significant congestion, which would tie up equipment and capacity and put additional upward pressure on rates to the US West Coast.

A prolonged strike would also eventually be felt at European and Asian export hubs in the form of shortages of capacity and empty equipment, which could spread rate pressure to other lanes as well.

In the meantime, for Europe and Mediterranean shippers, transits around the Cape of Good Hope and the slowdown around Golden Week meant peak season goods had to be moved before the end of September in order to arrive in time for the Q4 consumer events. The pull forward of peak season on these lanes saw demand and rates decrease significantly since July.

In the meantime, for Europe and Mediterranean shippers, transits around the Cape of Good Hope and the slowdown around Golden Week meant peak season goods had to be moved before the end of September in order to arrive in time for the Q4 consumer events. The pull forward of peak season on these lanes saw demand and rates decrease significantly since July.

Asia - N. Europe rates fell 36% in September to $5,074/FEU, a level 41% below the July peak but still more than triple 2019 levels. Prices to the Mediterranean started easing earlier in the summer than those to Europe, decreasing 28% in September to $5,142/FEU, a level 34% below the July peak but 125% higher than in 2019.

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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