The traditional pre-Lunar New Year surge in container shipping has softened freight rates for routes from Asia to both U.S. coasts, but various factors continue to influence longer-term pricing. According to the Freightos Baltic Index, Asia-U.S. West Coast rates dropped 10% to $5,321 per forty-foot equivalent unit (FEU) during the week ending Jan. 17, while Asia-U.S. East Coast rates declined 3% to $6,715 per FEU.
Judah Levine, head of research for Freightos, noted that rates are easing post-Lunar New Year preparations. He added that increased competition among carriers, as new alliances prepare to launch, may also contribute to the decline.
Levine predicted that trans-Pacific rates could see a short-term rebound following Lunar New Year, driven by shipments delayed until after the holiday. However, a similar backlog and rate increase seem less likely for Asia-Europe trade, as many goods were shipped earlier than usual this year.
Lunar New Year, which starts on Jan. 29, typically prompts factory closures across Asia for several weeks. The recent dip in rates follows importers frontloading shipments ahead of the holiday, compounded by tariff threats from President Donald Trump. Although Trump backed off his initial global tariff promises, he announced plans for a 25% tariff on imports from Mexico and Canada by Feb. 1.
Levine mentioned that the timeline for implementing these tariffs might extend beyond February, given deadlines for reports and recommendations related to the International Emergency Economic Powers Act and Trump’s “America First” trade policy memorandum.
Separately, Levine commented on the Red Sea shipping route’s potential reopening after a ceasefire announcement by Houthi rebels. While this is a positive development, he cautioned that global shipping confidence in the route’s safety would depend on sustained peace, including ongoing negotiations between Hamas and Israel. Even after Red Sea transits resume, Levine expects weeks of adjustment for traffic rerouted through the Suez Canal to Asia, Europe, the Mediterranean, and North America.
The Freightos Baltic Index also reported a 17% decline in Asia-North Europe rates, which fell to $4,694 per FEU for the week ending Jan. 17, while Asia-Mediterranean prices dropped 7% to $5,283 per FEU.
Levine warned that schedule disruptions and vessel congestion in Europe and Asia could temporarily drive up rates. However, the long-term redeployment of capacity previously absorbed by Red Sea diversions, which had doubled rates through 2024, could create significant downward pressure on prices.
He added that strategies like slow steaming, idling, blank sailings, and increased scrapping might prevent a rate collapse, but an oversupply could drive prices to unprofitable levels similar to late 2023. At that time, trans-Pacific rates fell to $1,200 per FEU, while Asia-Europe and trans-Atlantic prices slumped to approximately $1,000 per FEU.
Source: www.freightwaves.com
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