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FBX Index September: Market Summary

The Freightos Baltic Global index fell 29% to $4,056/FEU in September as global demand slows and peak season failed to materialize in its typical timeframe. The current rate is 61% lower than its level a year ago, although still 170% higher than the pre-pandemic norm.

Improved congestion levels at the ports of LA/Long Beach – with waiting ships now in the single digits – meant more active capacity that, along with declining demand, contributed to the steeper rate decrease compared to other lanes.

Transpacific prices to the US West Coast fell the most sharply of rates on the major lanes this month, decreasing 45% compared to the end of August to $2,978/FEU, 80% lower than at the start of the year and marking the first dip below $3,000/FEU since August of 2020. However, this is still 128% higher than in September 2019.
Improved congestion levels at the ports of LA/Long Beach – with waiting ships now in the single digits – meant more active capacity that, along with declining demand, contributed to the steeper rate decrease compared to other lanes.

In the last few months many shippers have opted for East Coast destinations in order to avoid the peak season delays experienced on the West Coast last year, and to steer clear of possible port worker strikes (with stalled talks resulting in the first temporary industrial actions of the dispute late this month). Some of the improvement in congestion on the West Coastcan be attributed to a shift of volumes to Gulf and East Coast ports, where backlogs and delays have become and remain more problematic.

Asia – North Europe rates dropped by nearly 30% after being largely stable from May to August. Declining volumes driven largely by inflation pushed prices down to $7,046/FEU, 52% lower than a year ago but still more than 5X higher than its 2019 level as congestion remains severe at major hubs. Prices are now 51% below their level at the start of this year.

Slowing demand did result in lower transpacific rates to the East Coast, as prices decreased 23% since August to $6,952/FEU, but congestion and increases in volumes may have contributed to a slower decline than to the West Coast, down “only” 58% since the start of the year and still more than 150% higher than in 2019.
Asia – North Europe rates dropped by nearly 30% after being largely stable from May to August. Declining volumes driven largely by inflation pushed prices down to $7,046/FEU, 52% lower than a year ago but still more than 5X higher than its 2019 level as congestion remains severe at major hubs. Prices are now 51% below their level at the start of this year. Labour strikes at Felixstowe and Liverpool late in the month will likely contribute to congestion at alternate ports.

East Coast and European port congestion, as well as more stable demand, has kept the transatlantic lane prices anomalous. At $7,531/FEU, rates are higher than at the beginning of the year and are 8% higher than a year ago. Prices did decrease 9% compared to August, but this dip may be the result of carriers shifting excess capacity from other lanes as more stable transatlantic prices of about $8,000/FEU become a more attractive option for carriers.
Source: Baltic Exchange

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