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The global ocean freight rates continued to decline this week as the market is in mid of the traditional off-peak season. However, industry insiders expect the trend to reverse in November as the recent congestion on the US East Coast is expected to cause equipment shortages in Asia moving forward. 

The Freightos Baltic Index, dated October 22, reported the following week-on-week changes in booking rates:

Key takeaways: 

The global container shipping market continues to face a downturn as the traditional peak season demand shifts earlier in the year, leading to reduced booking activity in October. This trend has particularly affected major routes like Transpacific and Asia-Europe, where spot prices have seen significant declines.

Compared to July’s peak, spot rates to the US West Coast have dropped by 35%, while those to the East Coast have fallen by 38%. The Asia-Europe routes have experienced an even steeper decline, with prices down 60% to around $3,500 per FEU. Meanwhile, Asia-Mediterranean rates now stand at $3,927 per FEU, marking a 50% drop since July.

Despite the widespread rate reductions, some disruptions, such as Red Sea diversions, are limiting capacity, which keeps prices roughly three times higher than their 2023 levels.

Carriers remain cautiously optimistic about a potential recovery, spurred by early pre-Lunar New Year demand, as buyers anticipate longer transit times. In anticipation of a rebound, MSC has announced a general rate increase (GRI) for November, aiming to raise Asia-Europe rates to $5,000 per FEU. Other carriers are expected to implement similar pricing adjustments.

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