Volatility on container prices out of China to the North American West Coast

 Source: Freightos Baltic Container Price Index (SONAR: FBX.CNAW)  

Source: Freightos Baltic Container Price Index (SONAR: FBX.CNAW)
 

SULTAN OF SONAR SAYS: 

Friday, July 6, 2018 marked a major development in international trade, with the U.S. and China implementing aggressive tariffs on imports of the other's goods. While the fallout is unknown, there is substantial cause for concern that it might impact freight flows, especially on the West Coast. On June 9, the Freightos Baltic Container Price Index for China to North America West Coast showed that a 40 ft. container was priced at $1,398. On June 30th, the same lane showed the price had dropped to $1,168. This 19.6% decrease in container prices is reflective of less demand coming out of China to the North American West Coast.

As we have discussed on numerous occasions, container prices out of China to the North American West Coast (FBX.CNAW) provide good insights for what trucking volumes will be out of Southern California (on a lag of about 6 weeks).

If this maxim holds true this time, carriers that put trucks into the West Coast might be disappointed when the rates and volumes don't match the records of recent weeks. August and early September will tell us more about the kind of peak season we can expect. Stay tuned to SONAR and FreightWaves for indications of market deterioration that will be seen first off the West Coast.   

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