Transpacific ocean rates ticked up slightly last week, with prices level overall since early October, according to a new analysis by Freightos, and this "relative stability" shows that carriers are having some success creating a new price floor through capacity reductions even as volumes ease and fleet sizes grow. 

The booking and payments platform for international freight noted that West Coast rates of US$1,564/FEU are 15% higher than 2019 levels, while prices of US$2,213/FEU to the East Coast are 17% lower than in 2019.

Likewise, West Coast rates remain 17% above mid-July, pre-peak season, levels while East Coast prices are now lower than in July, possibly reflecting reports of some shift of volumes back to the West Coast now that labour issues there have been resolved. 

New Panama Canal restrictions on the way

In the same report, Judah Levine, head of research at Freightos, noted that new restrictions at the Panama Canal are underway — which could impact ocean carrier's route plans.

"And though, so far, low-water restrictions in the Panama Canal haven't seemed to impact container flows significantly, the Panama Canal Authority just announced that it will reduce daily transits from 34 — their level since July — to 24 in November, 20 in January and down to just 18 by February," he said.

"This significant reduction could increase the likelihood that more ex-Asia volumes will go to the West Coast or via the Suez Canal in the coming months," Levine added.

Asia - North Europe rates increased 8% last week and are just 5% below 2019 levels but remain in loss-making territory as carriers continue to struggle with overcapacity on the lane, as reflected in reports that carriers will push planned early-month GRUs to later in November.

Levine said carriers are facing similar difficulties on the transatlantic, where some daily rates dipped below US$1K/FEU last week.

"Some carriers announced planned GRIs for mid-November to push rates to US$1,600/FEU, but these increases will only stick if liners can finally bring capacity down to the level of demand," the Freightos head of research added.

"On the industry level, overcapacity is estimated to peak next year, after which some carriers expect the market to balance out, while some analysts expect the market to be in some state of oversupply through 2028."

In air cargo, the Freightos report said there are signs that global volumes are increasing with Freightos Air Index China - North America rates dipped by 2% last week, but at US$4.73/kg are 36% higher than in early August.

"Recent increases in e-commerce volumes and significantly fewer passenger flights than in 2019 are likely contributing to rising rates," the report added.

It further went on to note that Asia - N. Europe prices increased 11% last week to US$4.30/kg, a 40% increase since early September and their highest level since April.