Here are the latest China-US container rates:
- China-US West Coast prices (FBX01 Daily) increased just under 1% since last week to $1599/FEU. Rates are 1.5% higher than the rates in 2019 this time
- China-US East Coast prices (FBX03 Daily) are down a more significant 5% from last week, reaching at $2690/FEU. This rate last year’s was about 2% higher than now.
- Ocean rates stayed stable, with China-US West Coast rates hovering at $1599/FEU as carriers blank record number of sailings to meet falling demand.
- Air cargo rates remain high and continue to rise for China exports, driven by pent up demand and low capacity.
- As panic buying relaxes, focus on household goods and drop in consumer demand being felt domestically in US.
Global demand for many items other than essential household goods and medical supplies continued to dip, with the freight industry still feeling the impact. Larger multinational importers appear to be anticipating this to an even stronger degree, reducing orders or slowing imports. To accommodate this, some carriers rolled out new delayed transit or storage services to slow their arrival.
Impact on ocean freight
To keep ocean freight rates from collapsing, ocean carriers blanked a new record number of sailings from now until as late as the end of June. The cancellation of more than 220 sailings appears to have kept rates steady this week as the China-US West Coast rate was unchanged and China-US East Coast prices lost only 5% since last week.
Impact on air cargo
While ocean freight demand has dropped, the absence of passenger jet capacity and the high demand for urgent supplies has kept air cargo rates extremely high.
According to WebCargo data, air rates from Europe to the US remained high yet stable. Meanwhile, for flights out of China, Freightos.com marketplace data indicates a further 25% increase in air rates to most US and EU destinations since last week, putting rates at three to four times their normal level for this time of year. In many cases, this is pushing importers to rely on express services, driving rapid fluctuations in capacity.
To accommodate some of those shippers priced out of air, several forwarders are offering priority ocean services with guaranteed space and as short as 10-day transpacific trip durations.
Impact of US focus on essential goods
Demand for trucking surged in March while supermarkets and other retailers scrambled to keep up with ‘panic buying’ during the first weeks of the shutdown. But as Americans adjust to the new reality, the pace has relaxed, and the shutdown of most other industries that trucking normally serves is now being felt in slumping demand for road freight.
The US’s largest online retailer is also adjusting to the focus on essentials: Amazon announced that starting in June it would no longer offer its last-mile Amazon Shipping service to third party sellers that do not use Amazon warehouses, so that it could focus on the high demand for deliveries to its own customers. However, it began to relax the restrictions for companies using FBA for third party sales. During the restricted FBA period, shipments to Amazon warehouses on Freightos.com dropped by as much as 75%.
But, despite these adjustments – as well as other disruptions, the hardships of ocean crews not being allowed to disembark, the looming financial impact on the industry and the situations in several countries like India where logistics have been extremely hard hit – incredibly, freight kept moving this week, delivering the essentials to most places where they are needed.
Freightos' daily FBX ocean rates index is now free for the rest of 2020 to help organizations contend with more volatile supply chains.