The seasonal transpacific price tumble has begun, with China-West Coast prices dropping 13% from last week. Last year they dropped by 25% in the three weeks following Chinese New Year, and by 17% over the same period in 2017.
With transpacific prices starting to fall, did President Trump just come to the rescue by, rather surprisingly, delaying the 1 March tariff increases? That announcement may stimulate some more shipment front-loading, but large stockpiles have their downsides too. Despite some big splashes, like the Tesla Model 3 release in China and Huawei’s 5G-ready handset to be launched at Barcelona’s Mobile World Congress, demand is down and freight prices will continue to drop. Exacerbating the normal seasonal decline will be the general health of world trade. The latest WTO international trade indicator is at its weakest since early 2010.
The seasonal price fall on transpacific lanes has begun. China-West Coast prices were $2,009 last week but dropped 13%, crossing the $2,000 magic mark in the process. Stepping back, they’ve actually dropped 17% from their pre-CNY high ($2,110 on 20 January).
For China-East Coast, last week’s price drop was more modest. They dropped 4% drop from $3,110, crossing this lane’s magic mark of $2,000. Prices have now dropped 10% from their pre-CNY high ($3,312 on 27 January). Last year, prices dropped 22% in the three weeks following last year’s holiday and in 2017 they only dropped 12% (but then kept dropping most weeks for the rest of the year).
The Freightos Baltic Indices reflect weekly spot rates for 40-foot containers based on 12 to 18 million price points collected every week on 12 main shipping trade lanes. The data includes a headline index – the FBX Global Container Index (FBX) – a weighted average of the 12 underlying route indexes. This data is published every Sunday.
Source: The Baltic Briefing