In the context of the drop in spot rates and macroeconomic signals that mark a decline in recession and inflation expectations.
Regarding to the behavior of spot rates, the Asia-West Coast route in the US (a key route for global maritime transport) has kept its rates stables for six consecutive weeks, marking values below 2019 in the last two weeks, despite the absence of the typical increase in demand before Chinese New Year (January 22). According to the Freightos Baltic Index (FBX), a weekly drop of 3% was registered to US$1.361/FEU, being 91% lower than rates for the same period in 2022.
On the other hand, on the Asia-Northern Europe route, fares rose. Last week they grew 10% to US2.978/FEU, despite this being 79% lower than the previous year in the same period.
The cancellations of the itineraries are on the rise (blank sailings) but the increase in the demand for transit on the Asia-Mediterranean route would explain the resistance of the values, remaining around US$4.000/FEU since the beginning of December.
As indicated by the FBX, the fall in demand and the decrease in congestion results in a change in capacity (from regional and smaller routes) back to interregional routes, in addition to the decrease in transit times, which are 5% lower in December and 35% lower in general than in 2019.
In the air cargo category, rates from China to North America and Europe, according to Freightos Air Index, have been flat in recent weeks, being 30% lower year-over-year at US$5.91/kg and US$4.92/kg. respectively. But even with price drops, the cost of fuel and labor are driving air cargo rates higher than in 2019.
The foregoing is the result of the macroeconomic trend of lower rates in maritime transport as a result of low demand, symptoms of the impact of a possible recession, an aspect that has not yet been defined. According to the Goldman Sachs survey, 57% of its clients expect a recession in the US, while specialized economists do not expect it and indicate only a 35% chance of occurrence, For the shipping industry, persistently high inflation in 2022 could be easing unevenly across the board, worrying that tight labor markets are failing to alleviate pressure on wages and service prices and potentially producing a shock of supply for raw materials.
