It’s a tale of two oceans for U.S. container imports. Freight rates for Asian exports crossing the Pacific are reaching new heights even as fleet capacity rebounds. Rates for European exports crossing the Atlantic are sliding even as fleet capacity declines.
Prior to the coronavirus, the secular shipping pendulum was swinging toward the East Coast ports. Now, the pendulum is swinging back — at least temporarily. The West Coast is seizing a bigger share of U.S. imports in the COVID era.
U.S. importers sourcing goods in Asia are opting for faster transits to California as opposed to the long route via the Panama Canal to ports on the Atlantic coast. Simultaneously, lower cargo flows from Europe are further curbing the East Coast share.
The East-West split has significant implications for land transport. The more cargo unloaded at the docks in the West, the better for rail and the worse for trucking, and vice versa.
Asian cargo unloaded in California and destined for Eastern states creates more rail volume eastward. Asian cargo unloaded in the East and destined for Eastern states leads to fewer rail miles eastward and more trucking miles westward.
What ocean rate data shows
The Freightos Baltic Daily Index — which estimates the cost to ship a forty-foot equivalent unit (FEU) container — reveals how the markets are diverging.
Since the beginning of March, when freight markets were particularly weak, the cost per FEU to ship from Asia to the West Coast (SONAR: FBXD.CNAW) has more than doubled. The cost from Asia to the East Coast (SONAR: FBXD.CNAE) is up by a third. But the cost from Europe to the East Coast (SONAR: FBXD.ENEA) is down by 2%…
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