Freightos: Weekly Ocean Freight Index Update

The freight rates ex-Asia continued to gallop higher in the final week of 2024 with support from stronger-than-expected demand. Rates to the US East Coast were particularly strong as carriers applied disruption surcharges for this lane in anticipation of a possible mid-month ILA strike. 

Key takeaways: 

Ocean freight rates originating from Asia exhibited a modest upward trajectory in the final week of 2024 driven by robust demand dynamics. Industry insiders expected that transpacific routes could face additional rate pressures in early 2025, spurred by a series of General Rate Increases (GRIs) scheduled for January.

The traditional seasonal surge in demand ahead of the Lunar New Year (LNY) is being amplified by an unusually high volume of shipments directed toward the United States for this period. Shippers are expediting imports in anticipation of potential tariff increases, contributing to record-breaking activity at the Port of Long Beach in November. While a post-LNY dip in volumes is typically expected, the ongoing pull-forward effect and the Red Sea diversion may mitigate the decline.

In a related trade development, Mexico recently imposed new tariffs on apparel imports from several countries, including China, with rates reaching as high as 35%. This policy effectively limits the applicability of INMEX, a duty-exemption mechanism, for specific textile and apparel categories. Importers using Mexico as a conduit for shipments to the US market will encounter heightened costs, potentially catalysing further shifts in global trade flows.

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