Good news for ocean carriers: The cost to transport a container from Asia to the U.S. is up year-on-year by double digits. Less-good news: The upward momentum of rates seen last week is gone.
According to Eytan Buchman, chief marketing officer of Freightos, “Last week’s spike in ocean rates has leveled off for the most part. This could mean that carriers overestimated how quickly Chinese manufacturing is recovering, in which case prices will remain at this level or even climb in the coming weeks.”
Freightos’ marketplace data confirms that “U.S. shippers are busy searching for freight bookings, with weekly search volumes reaching a high for the quarter last week,” Buchman said.
There’s a less optimistic interpretation as well. “It is also possible that the rate spike [last week] represented a surge in orders placed by importers before the economic shutdown began in the West,” he explained. “The leveling off [this week] would mean that U.S. importers are cancelling or not placing new orders, as much of the U.S. shelters in place and industries like retail are already feeling the hit.”
The evidence in favor of this theory: “There are reports of large shippers already cancelling orders and carriers blanking some sailings at the start of April for lack of demand,” Buchman said.
The daily cost to ship a forty-foot equivalent unit (FEU) container is tracked along various global routes by the Freightos Baltic Index. For services from China to U.S. West Coast ports such as Los Angeles and Long Beach (SONAR: FBXD.CNAW), rates were $1,515 per FEU as of Tuesday, up 17% year-on-year.
On the China-U.S. East Coast lane (SONAR: FBXD.CNAE) via the Panama Canal — to ports such as New York/New Jersey; Charleston, South Carolina; and Savannah, Georgia — rates were up to $2,745 per FEU as of Tuesday, a rise of 10% year-on-year.