Divide between Asia-US and Asia-Europe rates at historic levels

Image: © Andrii Yalanskyi | Dreamstime.com The price gap between container spot rates from Asia to North America and those to Europe has reached historic levels, with Sea-Intelligence warning that the current arbitrage could persist for several months. According to the latest analysis from the consultancy, Asia-US spot rates continue to rise, while Asia-Europe prices decline, creating an unprecedented premium for US importers. Using Drewry WCI weekly spot rate data from May 2012 to October 2026, Sea-Intelligence looked at four rate differentials between the transpacific and Asia-Europe trades. The most striking disparity was Asia to the US east coast (USEC), where the differential versus to North Europe reached $7,026 per 40ft in the latest week, in favour of the US – more than double the previous record of $3,179, recorded in June 2021. The Mediterranean-US east coast differential has also reached a record, of $6,726 per 40ft, the previous high being $2,828, also in June 2021. The pattern is similar to the US west coast (USWC) ports, where the difference between Asia-North Europe stands at $4,436 per 40ft in favour of the USWC. Sea-Intelligence said this premium was also comparable in scale to the extreme arbitrage seen in 2021, although the direction has reversed. In 2021, it favoured North Europe, reaching $4,888 in January and $4,510 in June. That was initially driven by pandemic-related disruption, and subsequently exacerbated by the grounding of the Ever Given in the Suez Canal in March. “Every time we analyse developments in the market, and try to assess metrics over a longer time series, we find that what was normal in the pre-pandemic era, simply looks different now,” said Sea-Intelligence. It explained that before 2020, freight rate movements of hundreds of dollars were considered significant, while changes above $1,000 were rare. Today’s much sharper and faster rate movements demonstrate that market dynamics have fundamentally changed. Normally, arbitrage should encourage carriers to shift capacity between trades, eventually narrowing the difference. But Sea-Intelligence cautioned that such changes took time, operationally, and because carriers needed confidence that a pricing imbalance would persist before redeploying vessels. It also warned there was a precedent for a prolonged arbitrage. In the first half of 2021, the gap opened rapidly around January and remained elevated until June. Though that history does not mean the current transpacific premium would necessarily last as long, the consultancy added – rates could simply fall. But it does mean the size of the arbitrage should not be interpreted as evidence that transpacific rates are about to fall, while Asia-Europe rates rise. Sea-Intelligence concluded that the post-2020 market required a rethink of how shippers manage freight price risk. “The market has already changed fundamentally. What we need to see now is the contracting process – and the associated risk management and budget processes – change, to reflect this new reality.” Watch our latest podcast with Portcast to learn more about where margin leaks occur in freight forwarding, and how to mitigate against them