1. Though transpacific rates continued to ease last week, carriers are reportedly considering June GRIs. With demand expected to increase only gradually in the coming months, rates will likely only increase if carriers remove additional capacity.
2. On Asia - Europe lanes, rates have been stable since mid-March and on par with 2019 levels, and some carriers are trying to reduce effective capacity by slowing sailing speeds even as they add vessels.
3. Asia - Mediterranean rates are down 81% vs. last year but more resilient demand compared to the other major lanes had volumes increase so far this year, and at more than $2,400/FEU, rates remain 32% higher than in 2019.
4. More pessimism for an air cargo rebound before the fall, as volumes decline and capacity continues to recover. Freightos Air Index data has Asia - Europe rates at $3.57/kg, 57% lower than a year ago, and Asia - N. America rates of $4.03/kg were more than 70% lower than this week last year.
• Asia-US West Coast prices (FBX01 Weekly) decreased 6% to $1,430/FEU. This rate is 88% lower than the same time last year.
• Asia-US East Coast prices (FBX03 Weekly) dipped 1% to $2,379/FEU, and are 85% lower than rates for this week last year.
• Asia-N. Europe prices (FBX11 Weekly) also fell 1% to $1,379/FEU, and are 87% lower than rates a year ago.
Transpacific ocean spot rates continued to ease last week, with prices to the West Coast now down 18% from their GRI-driven mid-April climb. Some observers see early signs of a rate war in this retreat, and indeed, a smaller share of capacity has been removed in May compared to April even as rates have declined.
Carriers are nonetheless reportedly planning June GRIs on the transpacific, though there is skepticism these will result in more increases unless significantly more capacity is removed as demand is projected to increase only gradually into next month.
Some retailers, including many in the apparel industry, are still contending with inventory surpluses and may wait until as late as the fall – when they hope to have less stock and a better sense of consumer demand – to place their peak season orders.
On the Asia - N. Europe lane – where rates have been stable overall at about $1,400/FEU since mid-March and are on par with 2019 levels – alongside blanked sailing strategies, some carriers are actually adding vessels but slowing sailing speeds enough to add days to transit times and reduce effective capacity levels.
Asia - Mediterranean rates have now fallen 81% since a year ago, but at $2,441/FEU prices on this lane have proven more resilient than Asia - Europe rates. Spot prices to Mediterranean ports are still 32% higher than in 2019, and as demand has held up and Q1 volumes actually increased compared to a year ago, some carriers are increasing capacity on this lane.
In air cargo, hope for a demand and rate rebound before the fall peak season months may be fading, as volumes decline and capacity continues to recover. Freightos Air Index data for last week had Asia - Europe rates at $3.57/kg, 57% lower than a year ago, and Asia - N. America rates of $4.03/kg were more than 70% lower than this week last year.
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