Transpacific carriers struggle with diverging rates and stalled demand recovery, as market dynamics shift ahead of the Lunar New Year.
Ocean carriers are facing challenges in balancing demand and capacity on the transpacific routes as freight rates diverge and demand recovery stalls, according to a report by American Shipper.
Recent Freightos data indicated that West Coast rates fell by six percent last week to $1,963 per FEU following a general rate increase. In contrast, East Coast prices rose by eight percent to $3,150 per FEU, although they remain 15 percent lower than a month ago. Despite these fluctuations, rates are still above the October lows of $1,400 and $3,000 per FEU.
Judah Levine, Head of Research at Freightos, noted that slumping demand in the fourth quarter and an expanding fleet are putting downward pressure on rate levels, making mid-month increases unlikely to be sustained. A more significant rebound is anticipated closer to the Lunar New Year, as shippers rush to place orders before the Chinese factory closures.
Analysts have observed that approximately 60 percent of cargo moves under contract while 40 percent operates under spot rates; however, these figures can shift when capacity tightens. Despite the soft market conditions, carriers continue to deploy new tonnage.
A potential wildcard in demand forecasts is a pause in U.S. imports as manufacturers await a Supreme Court ruling on President Donald Trump's emergency tariffs. Neale Mahoney from the Stanford Institute for Economic Policy Research suggested that Trump could leverage the decision as a way to ease tariffs amid rising criticism over living costs.
On Asia-Europe lanes, rates have maintained recent increases despite overcapacity. Asia-Mediterranean prices remained steady at $3,342 per FEU after a 15 percent rise earlier in December, while Asia-North Europe rates stabilized at $2,449 per FEU, significantly above the October lows.
