Is faltering consumer demand curbing imports, allowing port congestion to finally ease, releasing container-ship capacity and causing ocean spot rates to sink? Is this the beginning of “the big unwind”?
Or does waning West Coast port congestion stem from temporarily lower exports out of China due to COVID lockdowns, combined with a congestion shift toward East Coast ports? Is the economy still strong and the ocean freight market still fundamentally firm, with the port crunch to worsen in the second half, pushing spot rates higher?
“The problem is you can still tell plausible stories in each direction,” Flexport economist Phil Levy told American Shipper. “We keep looking for all the signals to light up one way and for something irrefutable to happen. But there continues to be strong signals on both sides.”
Trans-Pacific spot rates
Different freight indexes are telling different stories.
“At the moment [Asia-West Coast] demand is fairly low, almost unseasonably so,” said George Griffiths, managing editor of global container freight at S&P Global Commodity Insights. “We always see a lull post-Lunar New Year with rates coming off slightly. But this year they have fallen further than they normally do.”
S&P Global Platts currently assesses Asia-West Coast rates at $8,000 per forty-foot equivalent unit, not including premium surcharges. That’s down 16% from $9,500 per FEU in early March.