Maritime freight rates on major east-west routes are changing dramatically. The gap between Pacific freight rates and Asia-Europe rates has reached its highest level ever.
Decline in Asia-Europe rates and increase in Pacific rates
Clarksons' latest weekly shipping report announced that freight rates from Shanghai to Northern Europe fell by 5% last week, reaching $2,425 per TEU. Meanwhile, Pacific transit rates continue to rise due to strong demand. The report indicates that the difference between these two trades has reached the highest level ever recorded.
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Unprecedented rates in the US East Coast market
According to recent data from Xeneta, freight rates from Asia to the US East Coast reached $11,259 per FEU on September 17, while rates from Asia to Northern Europe were $4,103 per FEU. This indicates a difference of over $7,100 per FEU. East Coast market rates are approaching pandemic-era records, being only 11.2% below the historical high of $12,683 per FEU recorded in January 2022.
The factors behind this disparity are increasingly structural. In the Asia-Europe trade, more services are rerouting through the Red Sea, leading to a return of capacity and a reduction in ton-mile inflation caused by diversions in Cape routes. This contributes to lower rates, while other transport sectors continue to benefit from Middle Eastern disruptions.
In contrast, the Pacific transit market is supported by strong cargo demand and discipline among shipping lines. Xeneta reported that capacity offered from Asia to the US East Coast in September was 6-7% higher than in August, yet rates continue to rise. Peter Sand, chief analyst, stated that shipping lines "are taking advantage of the opportunity while the market is hot" and that rate pressures are expected to increase at the beginning of October and during China's golden week.
Meanwhile, the world's largest container trade region, intra-Asia trades, continues to report unprecedented revenue figures. The intra-Asia container index rose by 6% last week, reaching $1,402 per FEU, marking the fourth consecutive record.
