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The World Container Index, a measure of world container shipping costs, jumped by 13.5% week on week on August 2, 2018. The biggest gains were on the Shanghai-Los Angeles and Shanghai-New York lanes, which were up 30% and 18% respectively week on week.
Spot rates for Asia-U.S. east coast freight were up 8.9%, and an even bigger price spike is expected on the Asia-U.S. west coast freight, forecast to reach 10.5%.
Overall, ocean freight rates on the key Asia-North America container trade are expected to increase 10%-15% versus last year, possibly even higher, but ocean carriers remain concerned that the resulting revenue increase will still not be enough to offset rising costs. Therefore, carriers are indicating more General Rate Increases (GRIs) are to come. Another key concern is the potential negative impact of an all-out trade war between the U.S. and China, who have already levied tariffs and counter tariffs on each other.
Industry observers say prices are up for a number of reasons:
- increased demand resulting from a strong U.S. economy and onset of the peak season
- introduction of carrier GRIs and emergency bunker surcharges
- continued carrier cancellation of services, reducing capacity
- series of Asia typhoons that disrupted loadings and resulted in rolled bookings
Rate levels are always dictated by supply and demand. With capacity tightening and demand increasing, rates will continue on an upward trend. It is recommended to book freight as early as possible to avoid delays.
For more information, contact Debbie McGuire, Manager – Freight Solutions.
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