Container rates take steep decline due to looming port strike

Drewry’s World Container Index (WCI) decreased 13 per cent to US$4,168 per 40-ft container for the week of Sept. 9-13, spurred by a 21 per cent drop along the U.S. East Coast.

The latest Drewry WCI composite index of US$4,168 per 40-ft container is 60 per cent below the previous pandemic peak of US$10,377 in September 2021, but it is 193 per cent more than the average 2019 (pre-pandemic) rate of US$1,420.

The average composite index for the year-to-date is US$4,128 per 40-ft container, which is US$1,310 higher than the 10-year average rate of US$2,818, which was inflated by the 2020-22 COVID-19 period.

Freight rates from Shanghai to New York plunged 21 per cent to US$6,661 per 40-ft container. Similarly, rates from Shanghai to Rotterdam contracted 17 per cent to US$5,152 per feu. Likewise, rates from Shanghai to Genoa declined 10 per cent to US$5,256 per 40-ft box. Also, spot rates from Rotterdam to New York dropped nine per cent to US$2,011 per 40-ft container. Rates from Shanghai to Los Angeles fell seven per cent to US$5,627 per 40-ft box and rates from New York to Rotterdam eased four per cent to US$704.

Conversely, spot rates from Los Angeles to Shanghai increased one per cent to US$718 per 40-ft box.

Shippers are transferring their cargo from the U.S. East Coast to the West Coast to avoid the planned ILA strike in October, resulting in a drop in demand. This resulted in a huge 21 per cent decline in East Coast spot rates. Due to weak demand, Drewry expects east-west rates to decrease further in the upcoming weeks.