Ocean Freight Rates to Remain Stable

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Supply chain delays and Covid restrictions combined to slow operations at the Chinese port of Yantian this week, according to cargo marketplace Freightos. Delayed arrivals have left exports piling up in the container yard. As a result, exports are now allowed at the port only a few days before departure, while testing requirements have slowed trucking operations. Similar restrictions on drivers are contributing to congestion in Tianjin, with growing delays reported in Shanghai and Dalian as well.

Ex-China ocean rates were stable overall this week, though Asia – N. Europe prices increased 5 percent to $15,061/FEU. With the Lunar New Year holiday about to begin, rates will most likely stay level for the next couple weeks. Prices could increase when manufacturing picks back up, but as pre-holiday demand did not push rates up dramatically, it is possible that prices won’t increase very much after the holiday either.

Meanwhile, congestion at European ports and delays on the U.S. east coast pushed transatlantic rates up 9 percent this week to $7,407/FEU, their highest point since mid-November. In retaliation for Chinese Covid policies that resulted in canceled U.S. passenger flights, the U.S. Department of Transportation has suspended 44 Chinese airline flights from the U.S. to China starting at the end of the month. The new restrictions will likely worsen the capacity shortage from decreased passenger travel that has been a major contributor to extremely elevated air cargo rates during the pandemic.

Key insights:

1. Ocean rates stayed stable out of China this week as Lunar New Year is about to begin. Covid restrictions are leading to trucking disruptions and delays in multiple ports including Shanghai, Dalian, Tianjin and Yantian, but so far nothing to the extent experienced this summer.
2. Meanwhile, congestion at European ports and delays on the U.S. east coast pushed transatlantic rates up 9 percent this week to $7,407/FEU, their highest point since mid-November.

Asia-U.S. rates:

• Asia-U.S. West Coast prices (FBX01 Daily) increased 2 percent to $15,485/FEU. This rate is 255 percent higher than the same time last year.
• Asia-U.S. East Coast prices (FBX03 Daily) went unchanged at $16,781/FEU and are 191 percent higher than rates for this week last year.