U.S. West Coast Sea Freight Rates Jump 10%

Containers stacked at Pyeongtaek Port in Gyeonggi on July 1 (provided by Yonhap News Agency) Sea freight rates for export cargo bound for the U.S. West Coast surged by more than 10% over the past month, climbing above 9.5 million won for the first time in a month. By contrast, rates to the East Coast edged down, while short-distance routes such as China and Japan also showed weakness, underscoring a widening polarization in freight rates by route. According to the Korea Customs Service’s “September Maritime Import and Export Transport Costs” report released on Oct. 15, the average freight rate for export containers by sea to the U.S. West Coast last month, based on 2 TEU, came to 9.511 million won ($6,989). That marked a 12.3% increase from the previous month and is interpreted as adding to the logistics cost burden on exporters. In contrast, the rate to the U.S. East Coast stood at 9.339 million won ($6,862), down 1.3% from the previous month, showing a divergent trend from West Coast-bound shipments. Freight rates on Middle East routes, where geopolitical risks continue, turned upward again. Export freight rates to the Middle East last month reached 9.326 million won ($6,853), up 11.2% from the previous month. Rates to the Middle East had risen steadily since March before falling once in August, but traced a steep upward curve again just one month later. Rates to the European Union (EU) also maintained a firm tone, rising slightly by 0.9% to 5.04 million won ($3,704). While some long-haul routes showed strength, freight rates on short-haul routes in Asia all declined. Rates to China plunged 18.7% from the previous month to 511,000 won ($376), while Japan, at 623,000 won ($458), and Vietnam, at 1.448 million won ($1,064), fell 3.2% and 4.3%, respectively. All three routes extended their declines for a second consecutive month, appearing to be entering a stabilization phase. Maritime import transport costs showed mixed results depending on the point of origin. Rates for imports arriving from the U.S. West Coast, down 27.0%, and the EU, down 23.0%, fell sharply, while routes from Japan, down 6.9%, Vietnam, down 1.9%, and the U.S. East Coast, down 1.8%, also moved lower. However, import freight rates originating in the Middle East, up 9.1%, and China, up 11.2%, rose from the previous month, forming a contrast. Import transport costs by air faced broadly strong upward pressure. Air freight rates from the Middle East soared 53.6%, while routes from Vietnam, up 33.9%, Japan, up 23.8%, the EU, up 4.6%, and China, up 1.2%, all increased. By contrast, air import freight rates from the United States fell 11.9%, making it the only major country to post a decline.