Dive Brief:
- Ocean freight rates plummeted in March after a strong start to the year, according to data from the Freightos International Freight Index (FIFI).
- Rates on routes from China to U.S. West Coast ports dropped 23.92% from February to March. On routes to the East Coast, rates fell 19.53%.
- March rates in 2018 were significantly lower than in 2017. They dropped 26.04% YoY on China to West Coast routes, and 24.15% for the East Coast.
Dive Insight:
Inflated rates caused by the Chinese New Year are finally beginning to level off. The last week of March saw particularly low rates, dipping below $1,000 per TEU on China-West Coast routes, and less than $2,000 per TEU on China-East Coast routes.
While the rates are rebounding slightly in April, it's unlikely they'll peak to the levels of January and February.
Import volumes at West Coast ports were also down last month, dropping nearly 31% from February to March at the Port of Los Angeles and 22% at the Port of Long Beach.
The Port of Oakland attributed its import volume declines to a "seasonal lull" after the Lunar New Year. "Shipments traditionally slump as factories that produce many U.S.-bound goods temporarily shut down," it stated in a press release. The port's imports fell about 10% month-to-month, and 1.9% YoY.
Tensions have been flaring between China and the U.S., as the two nations pit tariffs at each other. High taxes on imported goods are likely to further decrease the import volumes arriving from China to U.S. ports.
In addition to imports tumbling, exports were virtually flat at Oakland, despite previous months of growth in export volumes.
"China’s restrictions on recyclable commodities such as waste paper contributed to the export growth pause," the port said.
The Asian nation banned 24 types of scrap materials at the beginning of the year and imposed a 0.5% contamination standard on March 1. The stricter standard is leading recyclers to pause and rethink their processes to create cleaner materials, slowing the rate of exports.
