Key insights:

  1. August was likely a record month for ocean import volumes to the US. And though carriers have increased capacity significantly compared to July, port congestion has worsened too, tying up that capacity and resulting in no rate relief for shippers. Asia-US ocean rates are still at the record levels set at the start of August, and more than 5X a year ago. 
  2. Air cargo capacity is still constrained by COVID outbreaks in China, sending China-US rates to more than double their level a year ago and 4X pre-pandemic norms. 

Asia-US rates:

  • Asia-US West Coast prices (FBX01 Daily) were stable at $18,425/FEU. This rate is 452% higher than the same time last year.
  • Asia-US East Coast prices (FBX03 Daily) likewise were unchanged at $20,057/FEU, and are 415% higher than rates for this week last year.

    • Analysis

With peak season in high gear, August is likely to set a new record for monthly US ocean import volumes and there is little relief expected in the near-term. In response, ocean carriers have increased transpacific capacity by approximately 22%. But with no way to increase port capacity, those additional ships are contributing to the new record number of vessels waiting for days outside of LA/Long Beach for a berth to open.  

So with much of that additional capacity effectively removed from the market, ocean rates have remained sky high, but stable. Asia - US prices went unchanged this week, and are at the same level as at the start of the month, though still 5X their level a year ago, with Asia - US East Coast rates still more than $20K/FEU. Congested ports in China and North Europe likewise have kept Asia - Europe rates at record levels – 8X this time last year – but stable as well.

Extreme ocean costs, delays as well as new rail disruptions in the US have many importers considering air cargo as an alternative. Though operations are improving at Shanghai’s Pudong airport, COVID-related disruptions are having a big impact on air cargo capacity and rates – now four times higher than pre-pandemic levels – out of China to the US. And ground handling at many US air cargo hubs are overwhelmed as well, with shipments arriving at Chicago’s O’Hare airport still stuck for days.