Key insights:

  1. Sustained transpacific demand has led ocean carriers to significantly increase capacity from Asia to North America in the last few weeks. But with no additional port capacity available, LA/Long Beach, and now major Chinese ports like Shanghai and Ningbo are seeing growing lines of container ships waiting offshore for a slot to open. 
  2. But the additional capacity, as well as power outages in China and COVID shutdowns in Vietnam that may be reducing the availability of exports, may have been enough for a rare decrease in ocean rates. Asia-North America prices fell 16% this week, but are still more than four times their level last year, and about 10X typical rates before the pandemic.  
  3. The dip may also hint that the peak of peak season demand – with delays making it possible that shipments not already en route may not make in time for the holiday season – could be behind us.

Asia-US rates:

  • Asia-US West Coast prices (FBX01 Daily) dropped 16% to $16,153/FEU. This rate is still 311% higher than the same time last year.
  • Asia-US East Coast prices (FBX03 Daily) decreased 16% as well to $18,711/FEU, and are 295% higher than rates for this week last year.

    • Analysis

Sustained demand and spiking rates have led ocean carriers to add significantly more capacity to the transpacific trade lane. But operational capacity at ports can’t be increased quite as easily. With ports already overwhelmed, those additional ships are contributing to the climbing number of vessels floating outside the ports of LA/Long Beach and now to a growing backlog off the coasts of Shanghai and Ningbo as well.  

But the additional capacity – as well as possible decreases in the availability of exports due to power outages affecting some manufacturing in China, and COVID shutdowns reducing productivity in Vietnam – may still have been enough to push transpac rates down this week.  The dip may also hint that the peak of peak season demand – with delays making it possible that shipments not already en route may not make in time for the holiday season – could be behind us.   

Asia-North America rates for both coasts fell by 16% – the first significant dip since August – but are still about four times their levels a year ago, and Asia-US West Coast rates are more than 10X their norm before the pandemic rates to the West Coast, with the spread of spot rates still reaching as high as $30k/FEU.

Shippers and logistics providers in Europe are likewise still struggling with congested ports, disrupted schedules, delays, and elevated costs. Though compared to the transpacific there has been less volatility in rates in the last few months, ocean prices from Asia to North Europe stand at $14,756/FEU, a 566% increase compared to this time last year.