Given the increased efficiencies achieved through digital freight platforms, dynamic pricing in the spot rate market often yields lower rates than service contracts. Contract rates are agreements between a shipper and a carrier in which a shipper commits to a large annual volume of containers in order to benefit from a lower rate than that offered to the general public.

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The imbalance of trade between Asia and the US keeps trans-Pacific westbound freight rates lower than eastbound rates. Most ships arriving from Asia to the US are heavily booked, while the return voyages are booked at less than 40% capacity. The imbalance is compounded by the current trade war. The strong dollar and retaliatory tariffs from China have made exporting from the US more costly. Further downward pressure on rates is caused by a larger volume of low value commodities like scrap materials being exported to Asia, while finished consumer goods imported to the US command higher freight rates. To learn more about the reasons for lower westbound freight rates, read here.