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FBX Index December: Market Summary

The Freightos Baltic Global index remained stable to end the year, increasing just 1% in December to $9,43/FEU, though rates are still 179% higher than a year ago and more than 6X the pre-pandemic norm.

In this year’s version of the post-peak season and pre-Lunar New Year (LNY) lull, transpacific rates went unchanged after their November decrease. While prices are down more than 25% from their record highs in September, they are still extremely elevated.

Asia-North America West Coast rates closed the month at $14,616/FEU, less than 1% lower than at the end of November but 248% higher than last December and nearly 10X the pre-pandemic norm. East Coast prices were also unchanged at $16,680/FEU, 209% higher than last year and 6X higher than normal.

Prices are expected to climb again ahead of LNY at the start of February but are not anticipated to fall significantly afterwards as inventory levels remain low. Retailers will use the window between LNY and peak season 2022 for restocking, likely allowing little respite to start clearing the backlogs.

Despite some indications of improvement, the ports of LA/Long Beach remain severely congested, which, along with no significant easing in volumes, is helping keep rates high. Prices are expected to climb again ahead of LNY at the start of February but are not anticipated to fall significantly afterwards as inventory levels remain low. Retailers will use the window between LNY and peak season 2022 for restocking, likely allowing little respite to start clearing the backlogs.

Despite smaller increases in ocean demand on the Asia-Europe lanes relative to the transpacific, schedule disruptions, trucking shortages, and the resulting port congestion continue to keep Asia-Europe freight rates extremely elevated as well.

Asia-North Europe prices increased 1% this month to $14,495/FEU, 156% higher than last year and nearly 10X the norm. Asia-Mediterranean prices climbed 3% to $13,569/FEU, 140% higher than last December and 7X more typical levels.

Increased spending on goods – especially by US consumers – is the underlying driver of much of the congestion, delays and disruptions still plaguing the industry. If the spread of the omicron variant prolongs the shift away from spending on services, it will likewise push the ocean shipping return to normal that much farther away, possibly making 2022 look much like the second half of 2021. Outbreaks at Chinese ports could cause reductions in operations as seen in Yantian this past summer, which could cause further delays, reductions in capacity, and additional price increases.
Source: The Baltic Exchange, Judah Levine, Research Lead, Freightos

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