FBX Index September 2023: Market summary

The Freightos Baltic Global index increased 16% month on month in August to $1,530/FEU, driven by early-month ex-Asia GRIs and backed by both improving volumes and stricter capacity management measures. This rate is 13% higher than in 2019 and 73% lower than a year ago.

Transpacific spot rates, which began increasing in mid-July, climbed to about $1,900/FEU in the first weeks of August and closed the month at $2,029/FEU for a 33% monthly gain and a 58% increase compared to 2019. Rates to the East Coast increased 18% to $3,075/FEU, 17% higher than in 2019.

National Retail Federation projections that import volumes would increase 6% in August compared to July and decline slightly but remain elevated through October suggest that these rate increases may reflect the peak of this year’s peak season volumes.

However, reports that carriers also continued to blank significant shares of transpacific capacity this month despite increased demand suggest that the success of these GRIs are also due to effective capacity management and reflect the current state of overcapacity in the market even as fleet sizes continue to grow.

Low water levels in the Panama Canal resulted in the reduction of the number of daily transits effective from the end of July. Restrictions are expected to remain in place for at least 10 more months. As container traffic is given priority in the canal, the impact in terms of delays or costs for ocean freight so far has not been significant – rates to the East Coast in fact climbed less sharply than those to the West Coast this month – and reports of shifts to the West Coast or Suez have likewise been minimal. Although some shippers will likely experience some delays, the availability of slack capacity and alternatives should mitigate the extent of any disruptions.

China – N. Europe Q2 volumes showed modest year on year growth, although no significant peak season increase has been reported just yet. Asia – N. Europe rates nonetheless climbed sharply to start the month and remained elevated through the end of August at $1,747/FEU, 38% higher than in July, and 13% higher than in 2019. Stricter capacity management likely sustained the GRIs on this lane, although there is skepticism that this rate level will hold.

Asia-Mediterranean demand remained strong this month and with rates at $2,313/FEU to close the month, prices climbed 16% compared to the end of July and were about level with August 2019.

Rates on the transatlantic fell sharply in August as volumes have continued to decrease but capacity remains higher than a year ago. Spot rates of $1,193/FEU at the end of August were 29% lower than a month prior and 35% lower than in 2019. Carriers have announced September GRIs for this lane and will likely remove capacity to try and push rates back up to profitable levels.
Source: Freightos