Freight rates climb as China’s factories stay open

 China-US ocean freight spot rates are climbing again, according to the latest rates update from Freightos, as China’s manufacturing stays open over the Lunar New Year holiday.

Rates to the US West Coast increased 6% last week and are up 22% since the end of the year, while Asia-North Europe prices also climbed 6% to a new high of $8,455/FEU, Freightos noted.

It added that air cargo rates Asia to the US are also increasing, as factories remain open to meet demand, with Freightos.com marketplace data showing a 5% climb this week and 50% increase since the end of January.

It said non-stop demand for ocean freight from Asia to the US also continued to overwhelm major US ports, still keeping ships waiting outside LA/Long Beach and now Oakland as well. 

The continued peak and congestion has some US retailers worried that Easter-related goods won’t arrive in time, while carriers are reporting fully booked ships through the end of the month. And with retailers still struggling to keep inventory levels up, there may be no easing until Q2.  

“These extreme delays effectively reduce available ocean capacity, and pushed rates up on some major lanes this week,” Freightos noted.

In addition to the rise in rates from Asia to the US and North Europe, it said Asia-Mediterranean prices climbed 4% and are approaching their January peak level. 

“Freight costs may also be skipping their typical Chinese New Year (CNY) lull this year due to China’s manufacturing staying open over the holiday,” the company said in its latest weekly update. “Normally, businesses shut down over the break and demand for freight – and spot rates – dip. But this year’s travel restrictions and efforts to keep up with demand has much of the workforce available and many factories open.”

It highlighted that observers were also warning that quarantine rules for returning truckers in China – a major sticking point in the reopening last March – could cause significant delays even if goods manufactured over the holiday are ready to ship.

“As factories stay open, air cargo rates likewise are skipping their normal CNY dip,” Freightos added. “Data on air cargo rates from China to the US from the Freightos.com marketplace saw prices climb 4% this week and are up about 50% since the end of January.”

Freightos noted that the rates reported and compared in the weekly report are FBX’s real-time daily rates – based on current rates being used by global logistics providers – for Tuesday of each week.

Weekly averages, and now daily rates, are accessible free of charge at www.jc56.cn