Freightos' monthly ocean rate report for July has arrived. The company has also developed a new monthly report tracking industry adoption of digital air cargo, much like IATA’s periodic report on eAWB implementation. Its first report is available here.
In July, ocean rates from China to the U.S. increased slightly:
- Peak season seems to have arrived. Ocean rates from China to the US West Coast (FBX01 Daily) climbed 3% this week, on the 4th successful GRI in the last two months. As a result ocean rates from China to US West Coast are up 68% since the end of May and 81% year on year.
- These elevated rates are quite surprising, as capacity is back to near normal and volumes are actually projected to be down, and point to how unprecedented the current environment is for ocean freight.
After China-US ocean rates fell for only the second time since the middle of May last week, prices crept up again this week, with carriers able to introduce their 4th General Rate Increase since the start of June.
The rebound in demand that started in June continues to keep rates up. Some industry insiders are predicting this year’s version of peak season will last only through September, and will focus on stay-at-home goods like furniture, kitchenware and electronics.
Demand is keeping ships out of China very full – with carriers able to charge premiums to prevent shipments from being rolled – even as capacity is nearly back to normal, with only 4% of Asia-US ships cancelled in August.
High rates while capacity increases (and possibly surpasses last year’s capacity level) and as volumes have been down just highlights the extent to which ocean trends have been unprecedented and difficult to explain this year due to the pandemic.
Air cargo rates from China to the US are climbing as well, and for the third straight week according to Freightos.com marketplace data, in part due to an influx of expected consumer electronics launches.
Though global capacity has been trending up, the removal of some freighters out of China for maintenance, and the increase in demand driven by peak season electronics roll outs are combining to put pressure on prices.