In the past, shippers frequently expressed to this reefer-focused broker that their rates were too high. However, feedback has shifted, with clients now indicating that the rates are competitive. The broker has also encountered challenges in sourcing reefer capacity recently, as carriers are increasingly rejecting loads at rates not seen in recent years.

Ocean Spot Rates Shift

In a related trend, the ocean spot rate for transporting containers from China to the U.S. East Coast typically exceeds the rate for shipments to the U.S. West Coast by about $1,000 per container. However, starting in mid-October, an unusual occurrence was observed: the rate for moving 40-foot containers from China to the U.S. East Coast was nearly equal to the rate for shipments to the U.S. West Coast. This parity is atypical; shippers usually incur approximately $1,000 more due to a two-week longer sailing time to the East Coast. The current spread of $1,029 indicates a normalization of this pricing difference.

This normalization is driven by an increase in rates for shipments from China to the U.S. East Coast, while rates to the U.S. West Coast have remained relatively stable. This suggests that ocean carriers may be managing capacity by blanking sailings. Supporting this observation is the Ocean TEU Rejection Index from SONAR’s Container Atlas applications, which shows current rejection rates from China to all U.S. ports at 17.3%. This represents the highest rate seen in the past five months, up from 13.1% at the beginning of November, indicating that the ocean TEU rejection rate for routes from China to the U.S. has reached a six-month high.