Spot rates continue to tick up from Far East to East and West Coast, but there is significant money at stake for shippers depending on which seaboard they choose to import into, according to data released by Xeneta.
Importing into the East Coast is currently $3,334 per FEU (40-foot container) more expensive than the West Coast. This current spread between the trades is greater than the total cost of shipping one container into either coast before the start of the Middle East crisis on Feb. 28 when spot rates stood at $1,879 per FEU into West Coast and $2,651 into East Coast.
“If a shipper has the flexibility of importing goods into U.S. West Coast instead of U.S. East Coast, then they must seriously consider it because there is dramatic savings potential, even if it means a heavier reliance on truck and rail to reach the final destination. This underlines the dynamic approach supply chain professionals must take in managing resilience and freight spend during major market shocks,” says Peter Sand, Xeneta chief analyst.
Key takeaways:
· Spot rates to the East Coast are up almost 300% compared to pre-Middle East crisis, demonstrating the negotiating strength carriers have right now. But the European trades show there is a ceiling, with spot rates into North Europe and Mediterranean softening for over a month.
“Uncertainty is toxic for supply chains and the uncertainty feels more severe in the U.S., which could explain why rates are still heading upwards. But US shippers should certainly look towards Europe when negotiating because it shows carriers are not invincible and it is possible to negotiate lower rates,” says Sand.
