To our valued customers,
The price to ship goods out of Asia is on the rise in June, reminding importers across many industries of the skyrocketed shipping rates during 2021’s nightmare supply chain circumstances.
- The rate to send a 40-foot container from China to the U.S. East Coast is at approximately $6,000 and rising. That is up nearly 200% from May 1 when the rate was $2,772.
- The same shipment from China to Northern Europe is currently $4,600, up more than three times its May 1 rate.
- Separate from these rates carriers are offering premium/priority rates to Northern Europe for as much as $10,000.
Capacity, already stretched thin by Red Sea diversions, is combining with an unexpected increase in demand in recent weeks to send ocean container spot rates spiking, and pose familiar challenges to shippers with long-term contracts, making rate visibility and market intelligence even more important to decision-making than usual times.
“Carrier adjustments due to Red Sea diversions for the most part succeeded in keeping containers moving on schedule through March and April,” says the latest update from Freightos. “But alongside the success were gradual signs that carriers were falling behind: pockets of congestion developed due to increases in port omissions, delays and missed departures alongside a decrease in empty containers at export hubs as well.”
With demand stable in those months though, carriers still had just enough capacity and equipment to keep the market balanced and rates elevated but level, the update added.
Things started to change dramatically in May, writes Judah Levine, Head of Research, Freightos. “Demand for ocean freight out of Asia unexpectedly picked up early in the month reflecting the possible start of restocking in Europe and an early peak season on the transpacific due to concerns over the Red Sea or labour-driven delays later in the year. As a result, congestion began to worsen and the supply side deficits began to be felt as empty container shortages in Asia and spiking rates.”
Since the end of April, Asia–N. America West Coast spot rates, for example, have spiked more than 70 percent, passing the $5,000/FEU mark and their previous 2024 high hit in February when prices first soared on the start of Red Sea diversions.
With capacity and equipment scarce and spot rates now several thousand dollars above long-term contract levels, annual agreements are once again becoming unreliable.
We will continue to provide updates as we receive further information.
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