Resilient demand for U.S.-bound cargo, congestion at Far East ports and a wave of blanked sailings are preventing trans-Pacific container spot rates from falling back from the early-July peak, even as prices on the Asia-Europe trades continue to retreat from peak-season levels.
The split of the major east-west trades follows an unusually early peak season that started in May and pushed container spot rates sharply higher through early July, analyst and SONAR data contributor Freightos (NASDAQ: CRGO) said.
Shippers across the trans-Pacific are holding relatively strong demand ahead of China’s Golden Week holiday. But the absence of a late July tariff increase may have removed one of the incentives for U.S.-bound importers to rush in or suddenly cut back on shipments.
Rates from Asia to the West Coast of the U.S. jumped 4% last week to over $8,100 per forty-foot equivalent unit (FEU), while rates to the East Coast of the U.S. were generally unchanged at around $9,600 per FEU.
The higher rates are due to a combination of factors, including continued demand for cargo, congestion in Far East ports due to weather and carrier capacity management through blank sailings.
“Some of the canceled sailings are likely related to vessel delays and broader network disruptions due to congestion,” the analyst suggested. Carriers are also actively reducing capacity ahead of the softer volumes expected during the Golden Week period and as demand is expected to slow more broadly as the peak season ends later in October.
But the cancelation data still points to relatively firm demand compared with prior years. That means carriers may not need to take out as much capacity as usual as the usual peak-season period comes to an end.
Pandemic comparison still overhyped
Though the current trans-Pacific pricing has been likened to the extraordinary pandemic conditions, today’s rates are still far below the highs of the Covid-19 import surge.
The Freightos Baltic Index data shows the Asia-U.S. West Coast prices were over $20,000 per FEU in September 2021. At that time, record import demand from the U.S. ran into severe port congestion and created record pressure across the entire container market.
At the time, carriers often wouldn’t accept spot cargo booked at base rates unless shippers were willing to pay premium surcharges, pushing benchmark prices to historic highs.
The current market is more similar to the peak season in 2024 when diversions around the Red Sea reduced effective vessel capacity, Freightos said.
Today, Trans-Pacific freight rates remain a major concern for shippers, but they are nowhere near the extraordinary levels seen in 2021.
Asia-Europe trade continues to slow
The trans-Pacific market is still relatively firm but spot prices on the Asia-Europe trades continued to slide last week as peak season volumes slackened.
Asia-North Europe rates dropped 15% to around $3,700 per FEU. That’s well below the July peak of close to $6,000 per FEU, but some $1,000 per FEU above pre-peak season levels which began in late May.
Asia-Mediterranean rates fell 7% to about $3,900 per FEU after peaking at over $7,000 per FEU in July.
Conversely, Mediterranean pricing has fallen back to around the May levels, unlike the North Europe trade.
| Trade lane | Latest rate | Weekly change | Recent peak comparison |
|---|---|---|---|
| Far East–U.S. West Coast | More than $8,100/FEU | Up 4% | Near peak-season highs |
| Far East–U.S. East Coast | About $9,600/FEU | Roughly flat | Near peak-season highs |
| Asia–North Europe | About $3,700/FEU | Down 15% | Down from nearly $6,000/FEU in July |
| Asia–Mediterranean | About $3,900/FEU | Down 7% | Down from more than $7,000/FEU in July |
Congestion, market clearance split, capacity
The faster drop in Mediterranean rates likely reflects a greater increase in effective capacity on the trade as more vessels return to Red Sea routes, said Freightos.
Conversely, North Europe services remain hamstrung by capacity problems stemming from congestion at regional hubs and disruptions across inland transport networks, including low water levels on the Rhine River.
The prospect of an indefinite strike at German ports would add to the pressure.
The Verdi union is now voting on industrial action that could take place as early as October. Such a move could worsen terminal congestion and limit carrier capacity on Asia-North Europe services.
