Posted on: October 22, 2024 / Last updated: October 22, 2024

Freight Rates for Asia-Europe and North America Continue to Drop but Remain Above Pre-COVID Levels

Freight rates for ocean shipping from Asia to Europe and North America have been declining but still remain significantly higher than pre-COVID levels. Here, we break down the latest developments based on industry insights.

Current Freight Rates

As of October 22, the latest news indicates that ocean freight rates from Asia to Europe and North America continue to decline.

Specifically, the rate for shipping from Shanghai to Los Angeles is $4,941, while the rate for Shanghai to New York is $5,169.

For shipments from Shanghai to Rotterdam, the spot rate stands at $3,373.

While these rates have fallen approximately 69% from the peak in September 2021 during the COVID-19 pandemic, they are still 2.3 times higher than the average pre-COVID levels.

This underscores the ongoing elevated cost of shipping despite recent declines.

Why Rates Remain High

The average rate for shipping from Asia to Europe and North America from the start of the year to the present has been $4,058, which is $125 higher than the average over the past 10 years.

One reason for these sustained high rates may be the shipping companies’ control over capacity, keeping rates higher than expected.

Notably, the rates for shipping to North America, particularly from Shanghai to Los Angeles and New York, are approaching $5,000, much higher than the $1,000 to $1,500 range that was common before COVID-19.

Industry insiders note the stark contrast but also suggest that the pre-COVID rates were unsustainably low, leading to financial difficulties for major shipping companies.

As such, the current rates, though high, may be more viable for the industry in the long term.

Outlook for the Future

While there are some predictions of further declines in freight rates, it is unlikely that rates will fall as drastically as they did in the past.

Compared to pre-COVID conditions, it is expected that shipping costs will maintain their elevated levels, signaling a new era of pricing for the global shipping industry.