Key insights:

1 Asia - Europe ocean rates ticked down last week, but prices are still 12% - 18% higher than in November. Carriers will attempt to push them up further on mid-month GRIs as Red Sea diversions drive shippers to move pre-Lunar New Year orders early, with some congestion at East Asian container hubs already being reported.

2 Transpacific rates rebounded by more than 10% last week and GRIs are expected on this lane as well. Frontloading ahead of a possible ILA strike in January helped keep rates up through early December, though President-elect Trump’s explicit backing of the ILA last week may make a strike less likely.

3 Unseasonal US ocean import strength is also due to some pull forward ahead of expected 2025 tariff hikes, already resulting in some reports of refrigerated container shortages for US exporters.

4 Global air cargo capacity hit a record high this year, but IATA projects that some constraints on capacity growth could limit volume totals next year.

5 But air cargo demand projections based on e-commerce volume increases are being challenged by observers who expect growing opposition to the flood of low cost Chinese exports – including new steps proposed by the EU this week – to curb e-commerce growth or even cause this air cargo segment to contract in 2025.

Ocean rates - Freightos Baltic Index:

Asia-US West Coast prices (FBX01 Weekly) increased 10% to $4,301/FEU.

Asia-US East Coast prices (FBX03 Weekly) increased 13% to $5,814/FEU.

Asia-N. Europe prices (FBX11 Weekly) fell 5% to $5,051/FEU.

Asia-Mediterranean prices (FBX13 Weekly) fell 2% to $5,761/FEU.

Air rates - Freightos Air index

China - N. America weekly prices increased 8% to $7.30/kg.

China - N. Europe weekly prices dipped 5% to $3.51/kg.

N. Europe - N. America weekly prices fell 4% to $3.03/kg.

Analysis

Asia - Europe/Mediterranean container rates ticked down slightly last week, though mid-month GRIs will attempt to push rates up soon. But current rates of more than $5,000/FEU remain very elevated. Prices are 12-18% higher than at the end of November and more than 40% higher than in October due to the Red Sea diversion-driven early start to pre-Lunar New Year demand this year. This volume increase is combining with some bad weather in the Far East to cause congestion at some container hubs in Japan and China.

Transpacific rates rebounded by more than 10% last week and GRIs are expected on this lane as well. Even with last week’s gains though, prices remain lower than at the end of November. But relative to Asia - Europe, transpacific rates have shown more buoyancy since the end of peak season due to frontloading ahead of a possible ILA strike on January 15th and expected tariff increases with the incoming Trump administration.

The pull forward for the strike is likely exhausted by now as the pre-January 15th arrival window has closed. But President-elect Trump’s recent explicit backing of the ILA and its opposition to even semi-automation introductions at these ports may make a strike, or at least a prolonged one, much less likely to happen. Anticipation of tariff hikes next year is likely still driving some unseasonal volume strength, also reflected in reports of a shortage in reefer containers.

You can check out our full 2025 Ocean Preview here.

In air cargo, IATA reports global capacity reached a record high this year. But with record volume strength so far this year – primarily driven by surging B2C e-commerce volumes – it also projects that constraints on capacity growth could cap volume growth next year.

This new source of demand has kept capacity out of China tight and export rates at peak season levels throughout the year for these lanes. Recent shifts of capacity from lower-volume trades like the transatlantic to the transpacific to accommodate peak season demand – as well as increase in shippers routing more ex-Asia, North America-bound volumes through Europe – have led to rate hikes on these routes as well. Freightos Air Index transatlantic rates of $3.03/kg last week were 88% higher than at the end of September.

But volume growth projections for next year are mostly based on expectations of continued e-commerce volume growth. Some stakeholders think growing opposition to this flood of low cost goods exports from China – including a recent proposal from the EU – could curb this growth rate or even see this segment contract.