FBX Index October 2024: Market summary

The Freightos Baltic Global Index decreased by 28% in October compared to the end of September to $3,300/FEU as the pull forward of peak season demand to earlier than usual in the year has led to volumes easing earlier than usual. However, Red Sea diversions’ drain on capacity is still keeping these prices about triple their level a year ago and 166% higher than 2019 levels.

Transpacific spot prices to the West Coast fell 19% in October to $5,540/FEU and are 32% lower than their July peak as peak season came to an early end.

A big factor in the early transpacific peak season was the effort to import Q4 goods before the 1 October deadline for the possible ILA strike at US East Coast and US Gulf ports. Some congestion caused by what turned out to be only a three-day strike at the beginning of the month remained at US East Coast and Gulf ports until the end of the month, although operations have mostly recovered. With the end of the strike, carriers cancelled the sharp congestion surcharges that would have pushed rates up in October and November.

A big factor in the early transpacific peak season was the effort to import Q4 goods before the 1 October deadline for the possible ILA strike at US East Coast and US Gulf ports. Some congestion caused by what turned out to be only a three-day strike at the beginning of the month remained at US East Coast and Gulf ports until the end of the month, although operations have mostly recovered. With the end of the strike, carriers cancelled the sharp congestion surcharges that would have pushed rates up in October and November.

In the US East Coast, the rush to receive goods before the strike deadline saw October rates fall 41% month on month to $5,165/FEU, 47% lower than their July peak. The added urgency for shipments to the US East Coast in September and some shift of demand to the US West Coast in anticipation of a more disruptive strike may have resulted in the sharper rate drop for the US East Coast and their atypical dip below US West Coast rate levels.

However, even with easing demand and volume projections for the coming months lower than those in Q2, Transpacific rates above $5,000/FEU on these lanes are still $1,500 – $2,000/FEU higher than during the previous Red Sea crisis-era lull in demand back in April.

For the Asia to Europe and Mediterranean lanes, shippers front-loaded peak season volumes ahead of October as well, primarily to take longer transit times for sailings around the Cape of Good Hope into account.

As demand eased further in October, Asia – Europe rates fell 31% month on month to $3,489/FEU, 60% lower than the July peak. Meanwhile, Asia – Mediterranean rates fell 33% month on month to $3,451/FEU, 55% lower than the July peak, with rates for both lanes about back to their Red Sea-elevated floors reached during the previous demand lull in March and April.

With rates sliding on lower demand, carriers have started to increase the number of blanked sailings on Asia to Europe lanes. Ports in Hamburg and Felixstowe are still dealing with some congestion, and some vessel bunching persists in Shanghai, although waits at Qingdao and Ningbo have decreased. There is also anticipation that the pre-Lunar New Year demand increase could have an early start in November as European shippers still have to factor in longer transit times. These factors have some carriers hopeful that rates could rebound soon, as reflected in several GRIs announced for November.
Source: Freightos