Spot rates from South East Asia to the US East Coast have softened towards the end of May in line with what's happening on other major trade routes since the start of the year.
In a new analysis, Xeneta said spot rates from South East Asia to the US East Coast have fallen by 13.8% as of the end of May.
Average rates on this trade have fallen from US$13,650 per FEU to US$11,770 while still being US$5,000 per FEU, more expensive than during the end-May of 2021.
Indonesia-US East Coast rates
Xeneta said the biggest drop in spot rates since the start of the year came between Indonesia and the US East Coast.
The ocean and air freight rate benchmarking and market intelligence platform said here spot rates have fallen by 15.5%, though having started as the most expensive origin of the trade at the start of the year, it is still around US$100 per FEU higher than the average for the whole trade.
Overtaking Indonesia as the most expensive origin is Thailand, Xeneta said, noting that the average spot rate stands at US$11,930 per FEU, US$150 above the average rate for the whole region.
This is a reversal from a year ago when Thailand was one of the origins offering the lowest spot rate on this trade, it said.
"Singapore has been the cheapest country of origin for those looking to ship from Southeast Asia to the US East Coast all through 2022. However, it has also experienced the smallest drop in rates since the start of the year, falling by 9% from US$12,550 on January 1 to US$11,440 per FEU at the end of May," Xeneta added.
Along with being the cheapest origin, Singapore also marks itself as the only transshipment hub, whereas others are direct-export origins.
Xeneta noted that this falling difference in rates between origins is happening across the board in South East Asia to US East Coast trade.
At the start of the year, there was a US$1,500 per FEU difference between the highest rate (from Indonesia) and the lowest rate (from Singapore).
As of the end of May, the difference had fallen to a third of that, US$500 per FEU difference in rates from Thailand and Singapore, reducing shippers' incentives to adjust their supply chains by using feeder ships to move their cargo to a cheaper port ahead of the main journey.
Despite falling since the start of the year, the ocean and air freight rate benchmarking and market intelligence platform, further said that the spot rates from South East Asia to the US East Coast remain above those on the long-term market, albeit only just at US$500 per FEU.
As of the end of May, the average long-term contract within the past three months stands at US$11,300 per FEU, up from US$7,900 at the start of the year and US$3,750 at this time last year.
However, it is down from a peak of US$13,400 per FEU in April 2022, when the long-term rates were briefly higher than those on the spot market, Xeneta said.
