Despite the start of the peak shipping season in May, shipping rates from Asia to Europe have continued to decline. According to the Baltic Index, rates from Asia to North Europe fell 15% last week to $3,700 per container, down from a peak of around $6,000 in July. However, rates are still around $1,000 higher than they were before the peak season began in late May.
The decline in rates is more pronounced on the Asia-Mediterranean route, where rates fell 7% to $3,900 per container last week, down from over $7,000 in July. This route has seen a significant increase in capacity, with more ships passing through the Red Sea, and congestion in North European ports has limited capacity on Asia-North Europe trade routes.
The German union Verdi is voting on whether to go on an open-ended strike in ports, which could start in October and exacerbate congestion in the region. Meanwhile, strong demand on the trans-Pacific route has kept rates at high levels, with rates from the Far East to the US West Coast rising 4% to over $8,100 per container last week.
The trans-Pacific route has seen a surge in demand, driven in part by the avoidance of tariffs and a recent rush to move containers before the "Golden Week" holiday. However, some shipping lines have canceled sailings, citing congestion and delays, and are reducing capacity to adjust to expected lower volumes during the holiday period.
Despite some cancellations, the rate of blanked sailings is lower than in previous years, reflecting the relative strength of current demand. Some indicators suggest that trans-Pacific shipping rates are approaching record levels seen during the pandemic, but data from the Freightos Baltic Index shows that rates are still far from the peak of over $20,000 per container seen in September 2021.
In contrast to the decline in ocean shipping rates, air freight rates from China to North Europe have fallen 18% in the past week, returning to levels seen in mid-August. Rates from China to the US have remained stable at around $6.50 per kilogram, but daily rates this week suggest an upward trend.
The shipping market is expected to remain volatile, with various factors influencing rates, including demand, capacity, and congestion. The ongoing pandemic and global economic trends will likely continue to impact shipping demand and rates in the coming months.
Key points
- Shipping rates from Asia to Europe have declined, with rates from Asia to North Europe down 15% to $3,700 per container.
- The trans-Pacific route has seen strong demand, with rates from the Far East to the US West Coast rising 4% to over $8,100 per container.
- Air freight rates from China to North Europe have fallen 18% in the past week, returning to levels seen in mid-August.
