Freightos: Weekly Ocean Freight Index Update

Global shipping costs showed signs of firming over the past week, but industry insiders have raised concerns about the sustainability of this trend as the seasonal festive rush and anticipation of potential tariff changes begin to taper off.

The Freightos Baltic Index, dated 05 December 2024, reported the following week-on-week changes in booking rates:

Key takeaways: 

Transpacific ocean freight rates have surged to start December, driven by proactive shipping ahead of a potential port strike on the US East Coast after January 15 and anticipated tariff increases in 2025. Rates to the US West Coast have climbed to their highest levels since January 2024, with some carriers aggressively implementing General Rate Increases (GRIs) to capitalize on the market's urgency.

However, the sustainability of these rate hikes remains uncertain. The shrinking window to move shipments from Asia to the East Coast before the potential strike, combined with inventory stockpiling during the October frontloading rush, suggests that many shippers are already well-prepared. Additionally, with tariff changes unlikely for several months, the upward pressure on shipping rates could dissipate in the coming weeks.

On the Asia-Europe trade lane, rates remained stable last week but have started to rise this week. Prices to the Mediterranean are approaching $6,000/FEU, reflecting a $1,000 increase since the end of November. This increase appears driven by carriers' strategic capacity management, including a surge in blank sailings, and an early uptick in demand tied to preparations for the Lunar New Year. Despite these gains, questions linger over whether the current upward trend can be sustained in the longer term.

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