Transpacific Rates Hit New Highs as Asia–Europe Slides

Asia–US East Coast spot rates reached a new high this week at roughly $9,400 per forty-foot equivalent unit, according to Freightos Baltic Index data published Aug. 11. West Coast prices climbed $1,300/FEU in the first week and a half of August to about $7,400/FEU.

Over the same period Asia–North Europe fell 8% to around $5,000/FEU and Asia–Mediterranean fell 7% to about $6,000/FEU.

Those two sets of numbers had been moving together since peak season began in late May. They no longer are, and the reason matters more than the headline rate.

Records on falling volume

The transpacific is not setting records because more cargo is moving. It is setting them on volume that is contracting.

US container ports handled 2.23 million TEU in June, and the Global Port Tracker produced by the National Retail Federation and Hackett Associates projects July at 2.21 million TEU, down 7.6% year over year. August is forecast at 2.22 million TEU, down 4.2%. Two consecutive months of year-over-year decline, and spot rates on the East Coast at their highest point of the year.

A rate that rises while volume falls is not a demand signal. It is a capacity signal — and Freightos points at capacity directly in explaining the divergence. West Coast prices fell through most of July, its analysis suggests, more because carriers added tonnage than because cargo disappeared. When those additions stopped, rates recovered $1,300/FEU in ten days.

The Europe side is the same mechanism running the other way. Carriers there are blanking August sailings and have cancelled or trimmed planned mid-month rate increases. Asia–Europe spot rates have given up about $1,000/FEU and 15% since peaking in early July, though they remain roughly $2,000/FEU above where they sat before demand picked up in mid-May.

The demand that didn't stop

The transpacific held up because the early peak season didn't end when it was supposed to.

Shippers front-loaded ahead of the expiry of Section 122 tariffs on July 23. A new round of Section 301 duties of 10% to 12.5%, covering 60 economies and affecting 99% of US imports, took effect the following day. The anticipated sharp increase did not materialise, and Freightos suggests some shippers who had pulled orders forward simply kept ordering. Others who had held back through the spring may now be releasing volume they had deferred.

NRF had projected a sharp July arrival peak followed by a steep drop through September. It has since revised that to steadier, elevated demand into the autumn.

What else is in the water

Two disruptions sit underneath these numbers and neither is resolving.

The Iran–Oman initiative on the Strait of Hormuz raised hopes of restored traffic. Iran's escalated conditions — a ban on US vessels, transit fees, reparations for damage from US strikes — have pushed the situation back to blockade and minimal transits. Attacks have extended through proxies to the Bab el-Mandeb, Saudi Red Sea ports and Egypt. Some carriers have nonetheless restarted Red Sea services they had suspended more than once.

Inland, low water on the Rhine is pushing European cargo onto road and rail, adding congestion that is helping hold Asia–Europe rates above where blanked capacity alone would put them.

Air is moving too. China–North America rates rose 6% to about $6.00/kg, China–North Europe 2% to $4.11/kg, North Europe–North America 4%. Freightos attributes part of that to emergency fuel surcharges rising as jet fuel climbs following the collapse of the ceasefire.

What it means for forwarders

The coast spread is closing. East Coast to West Coast now sits at roughly $2,000/FEU, down from about $2,300 on last week's averages, and the movement is coming from the West Coast side. If you have been routing all-water to the East Coast on landed cost, the arithmetic is shifting week to week rather than month to month. Re-run it before committing August bookings.

Asia–Europe is where the leverage is. Carriers cancelling announced mid-month increases is the clearest signal available that they do not expect the market to absorb them. That is a negotiating position, and it does not usually last long once blanked sailings work through.

Check your air surcharge clauses now, not at invoice. Emergency fuel surcharges are moving on jet fuel that is responding to a live conflict. Whether your rate agreements pass those through automatically or require notice is the difference between a forecast quarter and a surprise one.

September is the turn. Global Port Tracker has September at 2.16 million TEU, up 2.8% year over year — the first month of growth after July and August both fall. Volume declining while rates rise has been an unstable arrangement all summer. It resolves in one direction or the other, and September is where the first evidence lands.