On New Year's Eve, the freight rates on the Asia to East Coast route dropped by 3%.

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2025-01-27 11:36

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The extent and time of price decline

According to data from the Freightos Baltic Index, in the week ending January 17, 2025, container freight rates from Asia to the U.S. East Coast fell by 3% to $6,715 per FEU (40-foot equivalent unit). This price drop occurred on the eve of the Lunar New Year, a period that is typically a traditional off-season for the shipping industry.

Reasons for the price decline

　　Impact of the shipping off-seasonOn the eve of the Lunar New Year, many factories and logistics centers take holidays in advance, leading to a decrease in shipment volume, which in turn affects container freight rates from Asia to the U.S. coast.

　　Increased competition among carriersWith the establishment of new carrier alliances, competition among carriers has intensified, which may also lead to a decrease in some freight rates.

　　Early arrival of vesselsDue to some goods being backlogged and transported in advance before the Spring Festival, vessels have arrived at their destination ports early, which in turn affects subsequent sailing schedules and freight rates.

Forecast of future freight rate trends

　　Short-term upward pressureDue to early arrival of vessels, disruptions in sailing schedules and congestion in Europe and Asia may lead to some bottlenecks and delays at these hubs, which could exert upward pressure on freight rates in the short term.

　　Long-term downward pressureIn the long run, as the capacity absorbed by the Red Sea diversion is reintroduced to the market, it will exert significant downward pressure on freight rates. Some carriers believe that slow sailing, idle time, suspensions, and even increased scrapping in a seller's market may prevent a sharp drop in freight rates, but potential oversupply remains a risk.

The 3% price drop from Asia to the U.S. East Coast before the New Year is the result of multiple factors working together. Future freight rate trends will be influenced by various factors, including the supply-demand relationship in the shipping market, competition among carriers, and policy changes. Therefore, forecasts of freight rate trends need to consider multiple factors comprehensively and make cautious judgments.

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