Ocean rates on the major East-West lanes trended up to close the year. Asia – Europe prices increased 1% last week to $2,742/FEU but are 12% higher than mid-month and are up to levels last seen at the tail end of peak season. Asia – Mediterranean rates climbed 4% to reach the $4,000/FEU mark for the first time since early July, with prices 20% higher than during the first half of the month.
Current rate levels are supported by an early start to pre-Lunar New Year demand on these lanes as shippers face longer lead times due to Red Sea diversions. As such, prices are likely to stay elevated or continue climbing as we get closer to the holiday.
Periodic GRIs since October have generally been less successful in keeping rates elevated for very long on transpacific lanes than they’ve been for Asia – Europe trades. Price hikes since mid-December have pushed West Coast rates up 9% to $2,145/FEU and raised prices to the East Coast 15% to $3,364/FEU. But rates will be under upward pressure when transpacific pre-LNY demand picks up, and prices increased to start both 2024 and 2025. The holiday begins later than usual – February 17th – this year, which could mean another rate slide in the near term before demand increases. But if volumes do start to rise to start the new year, rate levels should keep climbing too.
Despite transpacific ocean import contractions and an overall dip in US ocean imports due to the trade war this year, ex-Asia volume strength to Europe, Africa and LATAM – as China diversified trading partners – saw global volumes grow 4%through early Q4.
S&P projects US ocean imports will fall again, by 2%, in 2026, making 2025-2026 – after the 2008-2009 financial crisis years and the 2022 – 2023 unwind from the pandemic – the third instance of consecutive years of US container import contraction over the last two decades. Like this year, observers like BIMCOexpect global volumes will continue to grow nonetheless.
Freightos Air Index shows air cargo rates fading post peak season. China-US prices fell 16% to about $6.25/kg, its lowest level since early November. South East Asia – US rates fell 19% to $4.60/kg and transatlantic prices dropped 14% to $2.16/kg. China – Europe prices slid 5% to $3.52/kg and SEA – Europe rates decreased more than 20% to $3.12/kg.
IATA estimates that – after sharp, e-commerce-driven, 11% growth in 2024 – 2025 global air volumes will be 3.1% stronger than last year. IATA also expects this year’s resilience to stretch into 2026 in the form of 2.6% annual growth. Opinions differ as to whether cargo capacity growth will outpace volume growth next year or not, making rate projections for next year difficult as well.
Judah Levine, Head of Research, Freightos Group
