Hope lingers for trans-Pacific box-rate bump

It has been a weak peak season in the trans-Pacific container trade, but Freightos still believes shippers moving cargo from Asia to the U.S. should expect a significant rate increase in the first week of November.

“Early indications are that carriers are looking for West Coast price rises in the $250-300 range and East Coast price rises in the $350-400 range. That would convert to 20% and 15% increases, respectively,” said Eytan Buchman, chief marketing officer at Freightos. He acknowledged, however, that West Coast prices “will still trail last year’s rates by more than 35%.”

“Mid-month price rises on both trans-Pacific lanes have held this week, a sign that demand is up, carriers have supply in check and that peak season, while not high, is not a total washout,” Buchman said. “The first week of November was when prices peaked for the season last year, driven by holiday sale stocking and a looming China trade tariff change. The same conditions apply this year, with importers having had plenty of lead time to front load before December 15’s tariff change.”

Freightos reported that the latest Freightos Baltic Index shows China-U.S. West Coast prices are virtually unmoved from last week at $1,365 per 40-foot-equivalent unit (FEU) container, up 4% on 2017 prices but down 46% from last year’s front-loading-driven prices. In 2018, many shippers raced to get cargoes to the U.S. before threatened tariffs were enacted.