Freight Rate Indices Reinforce Upward Trans-Pacific Trajectory
A confluence of high demand and systemic disruptions has produced record-setting ocean freight rates in 2021 — and data clearly shows the trend.
The Freightos Baltic Global Container Index (FBX) shows a dramatic spike in trans-pacific rates starting in late 2020. Calculated with pricing data from ports worldwide, the FBX Global Container Index offers a glimpse at general trends in maritime freight rates. It currently sits above $10,000 per 40’ container (FEU). This time last year the index sat under $2,500 per FEU.
But not all regions are experiencing the trend equally. As we have seen in our own experience, FBX indicates that routes from Asia/China to North America have borne the brunt of ascending container rates.
Asia-North America Freight Rate Indices Among Highest
It is no secret that ocean cargo rates from China to the U.S. have exploded in the last year.
Anecdotes and reports of individual orders north of $30,000/FEU are shocking shippers. The FBX China/East Asia to North America West Coast index shows the dramatic costs facing U.S. importers in general. This current report sits above $18,000/FEU — up five percent from the previous week.
The Asia/East Coast index is up as well. While the east coast has not experienced the same volumes from Asia as the west, FBX shows high costs, nonetheless. Generalized rates have climbed past $20,000/FEU according to the most recent weekly report.
Export Rates Stay Low as Empty Containers Leave US Ports
The FBX export indices sit in stark contrast to imports. While the import market from China contends with historic volume, costs, and congestion, US exports to Asia are experiencing the opposite.
Reports state that a large share of containers leaving the west coast for Asia are empty — a symptom of the container imbalance created by early pandemic shutdowns. Rates are up from a year ago because of general supply chain imbalances. But the latest FBX rate from the west coast to Asia sits at just $914 — down two percent from the week before.
High Shipping Costs Expected into 2022
The Freightos Baltic Index illustrates a trend that will likely persist into 2022. Persistent, pandemic-spurred disruptions have created a challenging and expensive maritime shipping landscape. Now existing backlogs and imbalances are magnified by the arrival of traditional peak season shipping volume. Peak season alone is likely to keep rates from tapering anytime soon.
U.S. importers face challenges ahead. Now is the time to analyze, prioritize, and strategize year-end shipping from China. Scarbrough International has experts and resources to help maneuver freight despite costs and obstacles. Reach out to learn how our freight forwarding team finds solutions where others cannot.