Steady volumes and more capacity kept ocean rates at a level high with reports of space staying tight through the start of August. This is at least partly driven by somewhat optimistic back to school orders.
Key insights and Data:
- Increased capacity and steady volumes kept US-bound ocean rates relatively unchanged.
- Despite fewer cancelled sailings through August compared to June through mid-July (13 vs. 45), scheduled blankings show carriers will use capacity management to keep rates from dropping.
- Air rates out of China increased again, driven by cancellations from new COVID restrictions, ongoing PPE demand, and new fall tech product releases.
- China-US West Coast prices (FBX01 Daily) went unchanged since last week at $2753/FEU. This rate is 90% higher than the same time last year.
- China-US East Coast prices (FBX03 Daily) were also level at $3343/FEU, and are 15% higher than rates for this week last year.
Some of the current volumes are also from container backlogs that rolled in the last few weeks when less capacity was on the market. Carriers have increased capacity by cancelling only 13 China-US sailings through the end of August, compared to 45 cancellations from June to mid-July.
But ongoing cancellations show carriers still relying on capacity management to keep rates up, making rates likely to stay stable as the backlog clears.
Indications that the May and June improvements in the US economy are fading, combined with the looming expiration of extended unemployment benefits, could mean that carriers will cancel even more sailings if volumes dip.
Meanwhile, air cargo rates from China to the US ticked up this week due to tighter capacity as few converted passenger jets are still in use, and new restrictions on US crews arriving in Hong Kong has led to US carrier cancellations.
But the bump is also driven by a jump in PPE demand as the virus surges in the US and the scheduled fall rollouts of consumer tech like the new iPhone and Playstation.