News / Trade growth getting stronger, but ocean freight rates stay flattish

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While rates on the transpacific continued to soften, and Asia-Europe trades showed marginal gains, the lift in pricing on the transatlantic, where rates grew earlier in the month, has levelled this week, according to Drewry. 

New York-Rotterdam remained flat in the week to 25 April, but slipped 3% to $2,214/feu on the return.  

Freightos FBX also recorded broadly flat rates, with North Europe to North America east coast at $1,732/feu.

Piers data quoted by the Journal of Commerce this week shows the trade has enjoyed a first-quarter resurgence in volumes – a shade under 900,000 teu was transported on the Europe-US east coast trade in the first three months of the year, 6.9% up on the same period of 2023.

However, recent trade growth has been even stronger – January witnessed a 4.4% year-on-year decline, but then volumes jumped 19.6% in February and a further 8.4% in March, according to the JOC.

This has been accompanied by declining capacity, which ought to support the narrative of strengthening freight rates, particularly given the loss-making depths to which they plumbed last year.

According to the eeSea liner database, in the first three months of 2023 there were between 51 and 53 liner services a month on the headhaul Europe-North America east coast trade, while January to March this year there have been between 43 and 45 – that’s a 15% decline in sailings.

The decline in total slot capacity is less pronounced – just over 2m teu slots were offered to the market in Q1 23, compared with 1.93m teu this year, a drop of 3.3%.

Against this background, the MV Dali allided with the Key Francis Scott bridge in Baltimore at the end of March, adding further pressure to the trade, at least in terms of sentiment – not a primary port on the transatlantic container trade, Baltimore hosted five box services, just one of which was from a major alliance, the 2M’s TA2/NEUATL2. 

Meanwhile, on the Asia-North Europe and Mediterranean, rates remain high, said Freightos, at more than double 2019 rates. Head of research Judah Levine noted: “While rate announcements for May show some carriers aim to keep prices at about their current $3,300 per 40ft and $4,300 per 40ft, respectively, others plan to introduce GRIs to try to push North Europe rates up to $4,500 and Mediterranean prices up to $5,600.” 

Disruption in the Middle East, following the seizure of MSC Aries, has not impacted rates – yet. Freightos warned that India/Middle East shipments may face higher insurance costs, but rate data ex-India have not changed. There are delays though from the loss of the ship: several thousand export containers waiting to depart from India remain in place. 

There was no evidence of rate volatility on ex-Asia lanes, where prices remain below the peaks of earlier in the year. Asia-North America are 90% higher than in 2019 to the west coast, and 60% up to the east coast, at $3,000 and $4,300 per 40ft respectively.

“Red Sea diversions continue to absorb capacity and make blank sailings rare even during these slow-season months,” said Mr Levine. 

Drewry’s composite index stayed flat, at $2,706 per 40ft – but up 55% year on year.

Drewry added that it expected freight rates ex-China to hold steady in the coming week.