Still-surging U.S. demand for Chinese imports saw Asia-U.S. West Coast ocean rates climb more than 5 percent again this week (Feb.22), at a time when demand for ocean freight (and spot rates) normally level off and begin to decrease in the weeks after Chinese New Year (see chart below), according to freight marketplace Freightos.
- China-U.S. West Coast prices (FBX01 Daily) increased 5 percent to $4,922/FEU. This rate is 259 percent higher than the same time last year.
- China-U.S. East Coast prices (FBX03 Daily) climbed 3 percent to $5,822/FEU, and are 119 percent higher than rates for this week last year.
U.S. demand for ocean freight imports continues to keep the crucial ports of LA and Long Beach overwhelmed. The port’s Executive Director Gene Seroka estimates that it would take a month to clear just the tens of ships already anchored and waiting in the bay.
With on-time arrival rates plunging and the Federal Maritime Commission intervening to try and reduce congestion-related charges, Seroka advised shippers and carriers to divert to other West Coast ports.
The Institute for Supply Management cites congested ports as a headwind to U.S. manufacturing. Factories can't get the materials they need to meet increased demand.
This non-stop demand is also pushing ocean rates to the U.S. up at a time when they would normally be starting to fall.
Rates typically climb ahead of Chinese New Year (CNY), stay elevated over the holiday, and then gradually decrease as China’s manufacturing comes back online and the backlog is cleared in the weeks after the break.
Now, nearly a week after CNY, rates from Asia to Europe have begun to decline slightly. But prices from Asia to the U.S. West Coast climbed 5 percent this week as still-surging demand and many factories that stayed open over the holiday have kept volumes coming.