It’s a tale of two oceans: The price to ship containers of cargo eastbound from Asia to the U.S. across the Pacific continues to recede from record levels. In contrast, the price to ship containers westbound across the Atlantic from Europe has risen through 2022 and is still hovering near all-time highs.
The East Coast port congestion that’s tying up ships coming from Asia via the Panama Canal is simultaneously soaking up capacity arriving from Europe. Trans-Atlantic vessel capacity is much more limited than in the trans-Pacific, with the balance remaining in favor of shipping lines — even more so due to congestion. Consequently, trans-Atlantic spot rates remain historically strong, bucking the global trend.
Trans-Pacific prices continue to slide
“This is going to be a slack season to write home about,” a freight forwarder source told Platts, referring to the traditional peak season. “There’s no way in hell they can get a rate increase through in this market.”
Drewry’s weekly assessment for Shanghai-Los Angeles fell 5% in the week reported on Thursday, to $6,521 per forty foot equivalent unit. That’s down 41% y/y. Given East Coast congestion,
Drewry’s Shanghai-New York assessment fared better. It was flat last week, at $9,710 per FEU, down 28% y/y.
Blue line: Shanghai-L.A. spot rate in $ per FEU. Green line: Shanghai-New York (All charts: SONAR)
The Freightos Baltic Daily Index (FBX) China-West Coast assessment fell to $5,533 per FEU on Friday. That’s its lowest level in 15 months and down 70% y/y. (FBX includes premium surcharges in its trans-Pacific numbers; Drewry does not. Because premiums were very high a year ago and are no longer charged, the FBX index declined much more steeply than the Drewry index.)
The FBX China-East Coast assessment was at $9,150 per FEU on Friday, down 54% y/y. Pricing trends continued to diverge over the past month, with the FBX East Coast index shedding 7% of its value and the West Coast index dropping 21%.
Spot rate changes over past month. Blue line: China-East Coast. Green line: China-West Coast
Trans-Atlantic rates stay high after rise
European services call at East Coast ports mainly from Le Havre, France; Bremerhaven, Germany; Antwerp; Belgium; London, U.K.; and Sines, Portugal. Mediterranean services mainly serve the East Coast after stops in Algeciras and Valencia, Spain.
According to the indexes, it’s now more expensive to move spot cargo westbound across the Atlantic from Europe to the East Coast than it is to move cargo eastbound across the Pacific from Asia to the West Coast — even though the sailing distance across the Pacific is almost twice as long (meaning that carriers are now earning dramatically more per FEU-mile in the trans-Atlantic than the trans-Pacific).
Drewry’s latest weekly assessment for the Rotterdam-New York route was $6,936 per FEU, up 8% y/y.
The FBX Europe-East Coast index was at $8,522 per FEU, up 44% y/y.
Blue line: FBX Europe-East Coast daily rates over past year. Green line: Drewry Rotterdam-NY weekly rates
Drewry’s assessment is just below highs hit in early May, while the FBX is around the sustained high it has been at since May, with the exception of a brief one-off spike in early June.
Rates still almost 5 times pre-COVID levels
As of Friday, the FBX Europe-East Coast index was 4.9 times higher than it was three years ago. The FBX Asia-West Coast index — despite a substantial drop since hitting record levels — was also 4.9 times higher than it was three years ago.
Blue line: Change in FBX Europe-East Coast spot rates vs. Aug. 20, 2019. Green line: change in FBX Asia-West Coast rates
