Key insights:

1 China-US West Coast ocean rates spiked 12% this week, as tight capacity amplified an uptick in demand. But this is likely a temporary bump as even more sailings were cancelled this week.
2 eCommerce may have contributed to the ocean bump, as more new SMBs seem to be entering the market. marketplace data show weekly average bookings for the last 3 weeks up nearly 30% year over year.
3 Air rates out of China continue to decrease. marketplace data indicate rates have fallen from May-highs to their (still-elevated) early April levels.
China-US rates:
• China-US West Coast prices (FBX01 Daily) jumped by 12% since last week to $1840/FEU. Rates are 24% higher than rates in 2019 at this time.
• China-US East Coast prices (FBX03 Daily) are 3% higher than last week, reaching $2664/FEU, and are 12% lower than rates for this week last year.
Last week’s initial signs of a bump in ocean freight activity grew into a spike in prices this week, with China-US West Coast rates jumping 12% to $1840, its highest level since February 2019.
While there are signs of economic recovery in the US and elsewhere, there are many others suggesting that a rebound is still a way off.
And ocean carriers may think so too, as some cancelled more July sailings this week, with more cancellations expected soon.
But even if this week’s spike is just a bump – amplified by the large number of cancellations – an uptick in demand for freight did trigger it.
Other possible reasons for the mini-surge include an increase in PPE going by ocean instead of air, US businesses finally re-stocking inventories that ran down during the shutdown, or, possibly anticipation of a new round in the trade war (remember that?).
eCommerce and SMBs
But another possible driver of an uptick in ocean volumes is the COVID-19 boost to eCommerce, as some carriers rolled out express ocean services to accommodate online sellers, and even UPS is pivoting to focus on eCommerce orders. data reflects this well.
Over the last three weeks, the weekly average bookings are up 28% year over year, and 20% over the average for the month prior.
Not only that, but the eCommerce surge may also be driving more people to become first-time online sellers. A new record for first time bookings on the Freightos platform was set in week 21, with last week’s level up 22% year over year.
Shipments of eCommerce orders are also a factor in air cargo rates staying elevated – and may keep volumes from collapsing even when PPE orders subside – though even out of China rates have continued to decrease. marketplace data shows rates out of China have fallen to their still-high early April levels, and WebCargo data shows Europe-US rates remain level.