The Freightos Baltic Global Container Index (FBX) climbed 38% this month to a new FBX-high of $3,377/FEU, a 143% increase annually, driven by still-surging global demand and the resulting container shortage that kept rates spiking on Asia-Europe and Asia-Mediterranean lanes.
Strong demand for transpacific ocean freight is still causing congestion and delays at US ports, and remains the main driver of the global equipment shortage.
For most of the month, Asia-US rates remained at about the same level they hit in mid-September, when pressure from Chinese regulators reportedly kept carriers from increasing any further the rates that had climbed since June.
But prices ticked up by about 8% to close the year at new highs and cross new thresholds – with China to US West Coast rates reaching $4,200/FEU, 208% higher than last year, and East Coast rates ending at $5,405/FEU, 110% above the price a year ago – perhaps indicating that any tacit agreement may be coming to an end as additional pre-Chinese New Year demand begins to build.
Sustained demand for increasingly scarce empty containers and other equipment kept rates spiking on the other major ex-Asia lanes. Asia-North Europe rates finished the year at an incredible $5,662/FEU, and Asia-Mediterranean prices closed at $5,644/FEU with both lanes about doubling in cost this month. Compared to this time last year, Asia-Mediterranean rates were 169% higher, while Asia-North Europe prices were more than three times more expensive. Compared to this time last year, Asia-Mediterranean rates were 169% higher, while Asia-North Europe prices were more than three times more expensive.
The Asia-US East Coast lane is typically the most expensive ex-Asia route, with rates an average of about 50% higher than prices for Asia-Europe and 35% more than Asia-Mediterranean. But the pandemic-driven shift in trade patterns that has kept trade surging since the summer saw another unpredictable end to 2020 in which containers from Asia to North Europe and the Mediterranean were about 5% more expensive than their US East Coast counterpart, and in which a cost of $5,000+/FEU has become the new normal for most ex-Asia lanes.
Vaccine campaigns already underway that get people – and their spending habits – out of their homes and back to normal, could finally lead to an easing of demand, congestion and possibly ocean rates, but how soon and what the new normal may look like of course remains to be seen.
About Judah Levine, Research Lead, Freightos
Judah is an experienced market research manager, using data-driven analytics to deliver market-based insights. Judah produces the Freightos Group’s FBX Weekly Freight Update and other research on what’s happening in the industry from shipper behaviors to the latest in logistics technology and digitization.
Source: Baltic Exchange