Key insights:

Asia - Europe ocean rates fell further last week, and are now just 13% higher than in 2019 as volumes fall, though some are optimistic for a rebound in H2.

Transpacific prices remain well below slow season 2019 levels, and rates of about $1,000/FEU to the West Coast – where labor negotiations took another step backward this eek – are complicating annual ocean contract negotiations.

Carriers are reportedly pushing for agreements at at least the $1,500 mark. If agreed to, this step may indicate optimism for a rebound in volumes and higher spot rates later in the year and into 2024, or that carriers are prepared to remove enough capacity to reach that rate level anyway if a rebound doesn’t materialize.

Ocean rates:

  • Asia-US West Coast prices (FBX01 Weekly) dipped 1% to $1,028/FEU. This rate is 94% lower than the same time last year.
  • Asia-US East Coast prices (FBX03 Weekly) fell 3% to $2,198/FEU, and are 87% lower than rates for this week last year.
  • Asia-N. Europe prices (FBX11 Weekly) decreased 7% to $1,414/FEU, and are 89% lower than rates for this week last year.


US inflation continued to cool in February, though high-profile bank failures may threaten to shake consumer confidence as global trade hopes for a demand recovery later in the year.

In the meantime, ocean rates continued to fall last week with Asia - N. Europe prices sliding another 7% to $1,414/FEU, nearly 90% lower than a year ago and just 13% higher than in 2019. Carriers continued to remove capacity as demand declines, though some experts are projecting a rebound in demand on this lane in H2.

Transpacific rates also trended down, with prices to the West Coast just above the $1,000/FEU mark, 25% below the 2019 level – even as rates were sliding post-Lunar New Year in March of that year – and 22% lower than in March of 2020 when demand was plummeting.

West Coast volumes slid faster than US imports overall in February, and the labor tensions responsible for a good part of that disparity escalated this week. Asia - East Coast rates of $2,198/FEU are 14% lower than in 2019.

Still-falling spot prices are complicating transpacific long term ocean contract negotiations between large to mid-size shippers and ocean carriers, many of which would typically already be finalized by now ahead of the May start date.

Robert Khachatryan, CEO of Freight Right, a US-based forwarder whose services are available through the marketplace, reports that at the recent TPM conference “carrier representatives were hinting at about the $1,800-$2,000/FEU range for West Coast volumes and $3,000 - $3,200 to the East Coast.”

But with spot prices well below that level – and still falling – this target is likely unrealistic to many shippers. The largest importers – whose contracts generally determine the benchmark for other BCOs each year – have yet to sign.

Khachatryan continued that “it is probably reasonable to expect that contract rates for mid-size forwarders and mid/large BCOs will end up being around $1,500-$1,600/FEU for the West Coast and $2,500-$2,700/FEU to the East Coast.”

Contracts signed above current spot-levels would probably reflect a few realities: Carrier costs have gone up with inflation, and current spot rates are below break-even for the box lines. As contracts run from May to May, contract rates of $1,500+ may also reflect both carrier and shipper optimism for an H2 rebound in volumes and higher rates into 2024.

On the flipside, these rates may also signal that – in the absence of a volume recovery and/or if too large a share of volumes opt for the spot market over contracts – carriers will remove enough capacity to push rates up to profitable levels anyway, a move taken in early 2020 but so far avoided in the last few months.

BCOs agreeing to these contract rates might also show that some importers are willing to pay something of a premium for better reliability. Meanwhile, shippers who manage to sign contracts nearer current market rates may be at risk of seeing those volumes get rolled for more lucrative spot containers if spot rates indeed climb high enough.