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The Freightos Baltic Global Container Index (FBX) climbed 9% last month to US$2,442 per FEU, an 89% increase annually
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Strong Asia-North Europe volumes due to holiday shipments and restocking of inventories put upward pressure on rates, and port disruptions are also causing problems
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Volumes, as well as the shortages, disruptions and elevated rates, are expected to persist into the new year and possibly up to Chinese New Year in February
An extended peak season and a container shortage are driving rates up on the Asia-Europe and Asia-Mediterranean lanes, according to a new report from the Baltic Exchange and Freightos.
This has caused the Freightos Baltic Global Container Index (FBX) to climb 9% last month to a rate of US$2,442 per forty-foot equivalent unit (FEU), an 89% increase annually, said Freightos, an online international freight marketplace, and Baltic Exchange, a freight market information provider.
The FBX is an international freight rate index providing market rates for 40-foot containers (FEUs), a service provided by the two partners.
In a market summary dated December 3, Freightos research lead Judah Levine said demand is still surging on China-US lanes, but rates nonetheless stayed level in November, likely due to pressure from Chinese regulators on carriers to keep already steep prices from climbing.
“As peak season normally fades in November, this year’s extended peak has China to US West Coast rates of $3,870/FEU at 191% of last year’s price, and East Coast rates at $4,900, nearly double a year ago,” Levine said.
The transpacific demand is leading to congestion and delays in US ports, declining reliability and to an acute shortage of empty containers in Asian origin ports and elsewhere.
Strong volumes on Asia-North Europe lanes due to holiday shipments and restocking of inventories that ran down earlier in the year put upward pressure on rates, and port disruptions are also causing problems, especially in the UK.
But as carriers are prioritizing scarce empty containers to the more lucrative transpacific lanes, the resulting equipment shortage for Asia-Europe is also contributing to the rate increase, said the report.
“Asia-North Europe rates hit $2,720/FEU, a 28% increase for the month and up 86% annually. And reports have carriers cancelling some capacity on Asia-Europe lanes in December as they add capacity on the transpacific,” noted Levine.
As restocking and the shift from spending on services to goods are responsible for a significant amount of the demand on both lanes this month, most observers expect volumes, as well as the shortages, disruptions and elevated rates, to persist into the new year and possibly up to Chinese New Year in February, the report said.
“But of course this year much remains uncertain, as the recent pandemic surge may impact consumer spending, and the expected distribution of vaccines could impact trade as well,” it said.
Photo by Arminius
