FBX Index October 2023: Market summary

The Freightos Baltic Global index decreased 23% month on month in September to $1,177/FEU as rates fell throughout the month from GRI-driven levels achieved in August across all the major trade lanes, including a rate collapse for Asia – N. Europe. These declines took place despite significant capacity reductions on most lanes, reflecting the general state of overcapacity now in the market, and mark an 8% decline from the level seen in 2019.

Transpacific spot rates to the West Coast closed the month at about $1,700/FEU for a 16% monthly decrease and East Coast prices decreased 21% to $2,713/FEU. The fact that planned September GRIs and PSSs did not materialise and that rates fell despite blanked sailings, likely signal that August was the peak month for this year’s peak season.

However, prices to the West Coast remain 26% above 2019 levels, with East Coast rates about 10% lower than in 2019 and both lanes above July levels. Taken together with reports that utilisation levels remain strong, these spot levels – even with this month’s declines – suggest that carriers are currently managing capacity successfully and preventing a rate collapse.

They will seek to keep vessels full and prices from falling too much in the coming weeks through further blanked sailings and service suspensions – tasks that will only get more challenging as volumes ease and record levels of new capacity enter the global market.

Carriers did not have the same success on Asia – N. Europe lanes where rates crashed 41% in September to $1,025/FEU, an FBX record low for this lane. Despite significant blanked sailings and slow steaming, utilisation levels were poor, pushing rates below contract levels and the $1,300/FEU mark that carriers were able to sustain from April through July. Carriers will blank even more capacity – about 20% announced so far – in October to try and push rates back up even as volumes likely decline on this lane too.

Asia-Mediterranean rates also fell sharply this month, despite reports of resilient demand. Prices declined 31% to $1,585/FEU, its lowest level since late 2019 and 4% lower than in September of that year, as supply has outstripped demand on this lane as well.

Transatlantic rates fell 12% this month to $1,047/FEU, 45% lower than in 2019. Volumes were likewise below 2019 levels, although they improved in July and August, suggesting that depressed rates are equally a function of overcapacity. Yet this lane’s high share of capacity deployed via vessel-sharing agreements or by alliances is so far complicating carrier efforts to remove excess capacity and push rates up.
Source: Freightos, Baltic Exchange

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