During the peak period before the Spring Festival, Asia-Europe shipping freight rates continue to rise

Sunny Worldwide LogisticsIt is a logistics company with more than 20 years of transportation experience, focusing on markets such as Europe, the United States, Canada, Australia, and Southeast Asia. It is more of a cargo owner than a cargo owner~

Last week, ocean freight rates from Asia to Europe and the Mediterranean increased significantly, with freight rates to Europe reaching ,300/FEU, which is close to the level before the Lunar New Year in January.

The reason for this increase in freight rates may be the surge in market demand before the Lunar New Year. To ensure sufficient stocks are shipped out of Asia ahead of the holiday slowdown, Asia-Europe/Mediterranean shippers have stepped up shipping efforts, pushing up freight rates. If shipping after the Chinese New Year is chosen, the containers will need to go around the Cape of Good Hope, which will lead to long waits, so shipping companies move in advance to avoid delays.

At the same time, carriers are working to increase mid-month GRI (general rate increase surcharge) rates and expect this trend to become more pronounced as the holiday season approaches in late January.

In contrast, transpacific shipping carriers did not face this pressure in advance. Since the urgency of the Spring Festival period has not yet arrived, it may take several weeks for demand to pick up before the holiday. As a result, freight rates in the region fell last week. Although carriers are trying to push up prices through the GRI in mid-December, with a target price increase of US,000 to US,000/FEU, the increase in freight rates may not be realized until the Spring Festival is approaching.

However, according to the latest U.S. seaborne import report released by the National Retail Federation (NRF), due to early shipments in the fourth quarter ahead of the January strike deadline and expectations of higher tariffs next year since Trump's election victory in November Strengthening, shipping volumes and freight rates were stronger than usual during what are typically slow shipping months. The NRF's latest estimate of total imports for the fourth quarter is 11% higher than the total reported in early October, or 640,000 TEU. Meanwhile, forecasts for 2025 import volumes are also 7% higher than in 2024, suggesting shippers may continue to front-load cargo into early 2025 in response to expected tariff increases.

For the two routes from Asia to Europe and the Mediterranean, freight rates are likely to rise further as seasonal demand increases around the Spring Festival. However, the increase in capacity of these two routes may restrain the increase in freight rates to a certain extent, and it will fall back at the end of February. In addition, the restructuring of carrier alliances that took effect in February is likely to increase competition in the market and put additional downward pressure on freight rates in March as carriers launch new services.

In terms of air cargo, despite last week being the busiest week of the year, freight rates for Chinese exports remained high and stable. This is due to measures such as increased capacity, advance loading and booking capacity, which effectively avoids chaos during peak seasons. Air freight index freight rates from the Middle East to North America have increased by about 20% since the end of October, with prices exceeding /kg for the first time last week, which may reflect the volume of sea and air combined transport this year as an alternative to direct air transport for Chinese exports. Pressure faced during peak season.

The main driver of rising freight rates and tight shipping space in China in 2024 is the surge in B2C e-commerce volume in North America and Europe. However, DSV speculates that while demand for low-cost commodity platforms such as Temu and Shein is likely to continue to grow, intensifying challenges with de minimis exemptions for cross-border air cargo shipments to consumers may curb the surge in e-commerce air cargo in 2025.