China-to Mexico ocean trade grows 18.9% YoY in 1st 3 quarters of 2024

This volume growth reached an all-time high in June, when 135,724 20-ft equivalent container units (TEUs) was shipped from China to Mexico.

Such massive growth in demand affected freight rates. On July 1 this year, just as demand reached its peak, average spot rates from China to Mexico West Coast hit $7,770 per 40-ft equivalent container unit (FEU). This was a YoY increase of almost 200 per cent.

Spot rates on the route have now softened, down by 51 per cent from the July peak and 18 per cent since the start of November, noted the Norway-based ocean and air freight rate benchmarking and market analytics platform.

If there is continued slowing in volume growth into 2025 and carriers in the route do not manage capacity accordingly, then it should put further downward pressure on spot rates.

The China-to-Mexico West Coast is an immature trade lane compared to the trans-Pacific trade into the US West Coast.

While volume growth into Mexico has been extraordinary in 2021, 2023 and 2024, in terms of actual numbers of boxes, it pales in comparison to the world’s other major front haul trades. This means freight rates are particularly susceptible to volatility and Xeneta can see this in its data.

During 2024, average spot rates have (to a greater or lesser degree) peaked six times on the trade from China to Mexico West Coast. In comparison, the trade from China to the US West Coast has peaked just three times.

Average spot rates into the Mexico West Coast increased by 28 per cent on September 1 before falling back by 34 per cent just a month later on October 1.

Volumes on this trade show it is an increasingly attractive option for shippers, but this volatility means it comes with the risk of unpredictable freight spend, Xeneta said in a blog post.

Trade between China and Mexico has been in the spotlight during 2024 due to suspicions that it is being used as a backdoor into the United States to avoid import tariffs. If this is true, then the arrival of Donald Trump for a second term in the White House could have significant implications given his stance on increasing tariffs on imports from both China and Mexico, Xeneta added.

Fibre2Fashion News Desk (DS)