Global ocean rates continued to decrease across the major tradelanes, according to a new analysis by Freightos, as most container traffic are already avoiding the Suez Canal, demand eases, and operations stabilise.

This development comes as Houthis recently announced threats to expand their attacks to Indian Ocean traffic, aimed at disrupting vessel flows already diverting away from the Red Sea toward the Cape of Good Hope.   

Freightos said weekly rate averages out of Asia last week fell another 7% to N. America and 7-10% to N. Europe and the Mediterranean.

It note that prices have continued to drop so far this week with rates to N. America now about 25% lower than its February peak, and prices to N. Europe and the Mediterranean about 30% lower than their respective peaks in late January.  

"Most observers expect rates to remain well above normal levels while diversions continue, as carriers are facing higher costs and the longer routes soak up capacity," commented Judah Levine, Head of Research at Freightos.

Current rates still 2.5X higher than 2019

Still, the report found that current rates are around 2.5X their levels in 2019, suggesting "there may be further to fall before prices settle at a new, elevated floor."

It added that optimistic N. American demand projections could also help keep N. America rates above normal, with carriers reportedly adding capacity for the coming month in anticipation of improving volumes.

Meanwhile, easing Panama Canal restrictions announced last week — which will increase daily transits to 27 — are also a good sign for transpacific shippers to the East Coast.

"However, concerns over the looming October deadline for the East Coast and Gulf port worker union and port operators to reach an agreement may pull some demand to the earlier months of peak season this year or shift some volumes to the West Coast, though many are hopeful that labor disruptions can be avoided," Levine commented.

He added that though ocean flows out of India are improving, there is still "additional pressure" on air cargo in the region which started in late January due in large part to Red Sea-driven disruptions, with demand for sea-air out of Dubai also still elevated.

Freightos Air Index rates out of S. Asia reached US$4.60/kg to N. America last week, 55% higher than in December, with prices to Europe nearly double their end of year level at US$3.55/kg. 

Demand out of China has also climbed in the last couple weeks, with growing e-commerce volumes one factor.

Freightos noted that rates reached US$5.94/kg  to N. America and US$3.93/kg to N. Europe last week.

"American passenger carriers opting to still not fully restore weekly schedules to China due to lagging tourism demand may also represent some capacity restraint for this lane," Levine, said.