Weekly highlights
- Asia-US West Coast costs (FBX01 Weekly) fell 8% to $1,431/FEU.
- Asia-US East Coast costs (FBX03 Weekly) fell 8% to $3,015/FEU.
- Asia-N. Europe costs (FBX11 Weekly) fell 9% to $1,747/FEU.
- Asia-Mediterranean costs (FBX13 Weekly) fell 4% to $2,131/FEU.
- China – N. America weekly costs elevated 19% to $5.33/kg.
- China – N. Europe weekly costs fell 3% to $3.92/kg.
- N. Europe – N. America weekly fell 1% to $1.70/kg.
Evaluation
Reported progress in US-China negotiations final month had some hopeful that the USTR would scale back or cancel its deliberate port name charges earlier than the October 14th roll out date. As a substitute, the previous week has featured a flurry of commerce stress escalations between the world’s two largest economies.
Along with tit for tat charges on US-linked vessels making China port calls beginning October 14th, China introduced new restrictions on uncommon earth steel exports with some taking impact instantly and others beginning December 1st.
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President Trump responded by threatening to cancel his late-month summit with Chinese language chief Xi Jinping in S. Korea and to introduce 100% tariffs on all Chinese language exports to the US beginning November 1st – although the 145% tariff pause that the White Home prolonged again in August will in any case expire on November tenth. The US administration additionally threatened, amongst different sanctions, to introduce port name charges or bar entry to vessels flagged in nations that vote for the Worldwide Maritime Group’s web zero framework on the IMO’s assembly this week.
When it comes to fast impression, as some Chinese language carriers have said that the USTR charges is not going to impression their schedules or result in surcharges for purchasers, and most different carriers have decreased the variety of liable vessels making US calls, the charges could also be unlikely to impression eastbound transpacific freight charges, operations or capability a lot for now. And as Clarkson’s Analysis estimates that China’s port charges would impression solely about 5% of port calls, and most impacted carriers will probably regulate vessel deployments to reduce publicity, these charges are unlikely to trigger a lot of an impression.
In any occasion, the most important driver of freight charges in the mean time is rising container vessel capability.
The primary stage of the Israel-Hamas ceasefire has elevated anticipation of a container visitors return to the Crimson Sea which, after some interval of schedule disruptions and congestion, would launch a big quantity of capability again into the market. CULines and different carriers are already rising companies by way of the Suez Canal. Most carriers nevertheless, is not going to resume transiting the Crimson Sea till after a big interval of demonstrated stability and safety.
However within the meantime, ocean charges have already fallen to their lowest ranges since simply earlier than the beginning of the Crimson Sea disaster in late 2023. Transpacific charges dipped one other 8% final week to about $1,400/FEU to the West Coast and $3,000/FEU to the East Coast. Present US import volumes estimated to be at their lowest since mid-2023 attributable to commerce conflict frontloading earlier within the 12 months – and projected to proceed declining by way of December – are contributing, together with provide development, to the robust downward stress on transpacific container costs.
However Asia – Europe demand is probably stronger than final 12 months. And regardless of quantity power and protracted congestion not too long ago worsened by labor disruptions at some key ports, container charges slipped 9% to $1,747/FEU final week and are additionally again to 2023 ranges, pointing to capability development as a key driver of present fee conduct.
Carriers will introduce GRIs of about $1,000/FEU for Asia-Europe companies in November, with some asserting will increase for Asia – N. America as properly, in an try and push charges up forward of Asia – Europe contracting season. Vital capability reductions in October nevertheless have thus far not succeeded in slowing the speed slide.
For air cargo, President Trump’s November 1st China tariff risk could also be driving some latest improve in charges, although the federal government shutdown can be reportedly inflicting some congestion within the US and this time final 12 months peak season demand had already began to select up. Freightos Air Index China – US costs elevated 19% final week again to mid-September ranges of about $5.30/kg, although charges had been approaching the $7.00/kg a 12 months in the past.
China – Europe costs fell 3% to $3.92/kg, however stay 5% larger than a month in the past and about degree with final October. The labor disruptions in Belgium impacting ocean freight are additionally inflicting air delays, particularly to passenger flights, although thus far cargo charges stay unaffected.
