Freight rates on trans-Pacific routes have returned to 2019 levels

The surge in demand has previously led to a surge in global freight rates.According to Freightos, logistics costs, which have played an important role in soaring inflation, are likely to play an equally important role in mitigating inflation as freight rates fall and operations normalize.

According to the latest report of Freightos, the freight rate on the west coast of Asia and the United States last week was 1,377 US dollars/FEU, down 91% from the same period of last year;The freight rate on the east coast of Asia and the United States was US $2,924/FEU, down 82% year-on-year;The freight rate between Asia and Northern Europe was US $2,405/FEU, down 83% compared with the same period of last year.

The decrease in transaction volume has stabilized the spot freight rate between Asia and the western United States for about one month at the level of 2019.As demand and port congestion eased, freight rates on the East Coast continued to fall, and although the rate of decline slowed in December, it is now only 12% higher than the level in 2019.

In addition, Asia-Nordic spot freight rates have dropped by 50% since mid-November, but are still 30% higher than in December 2019, partly due to increased shutdowns and new labor disruptions at some ports.

The transatlantic route costs more than $5,600/FEU, almost tripling what it was in 2019. Freight rates are down 30% from a peak of $8,000/FEU between May and September, despite increased capacity on still profitable routes by carriers and easing congestion.

Separately, Freightos said shipping lines expect to cancel about 50% of all scheduled flights from Asia to the U.S. and Europe after the Lunar New Year holiday, suggesting they expect the economic slowdown to continue into the typical post-Lunar New Year off-season until inventories are reduced and demand could pick up as early as sometime in the second quarter of the year.

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