Container rates down after a month of increases

The Drewry World Container Index (WCI) dropped five per cent to US$1,859 per 40-ft container, marking the first weekly decrease after four weeks of increases.

Spot rates on the Transpacific headhaul (the main shipping route from Asia to North America ) saw a double-digit decrease this week, with rates from Shanghai to New York plummeting 15 per cent to US$3,254 per 40-ft container and rates to Los Angeles dropping 12 per cent to US$2,328. Although carriers were able to briefly sustain rates using general rate increases (GRIs), that impact proved short-lived as rates softened this week due to waning demand, with retailers having already imported their holiday season merchandise. Drewry anticipates rates will either soften slightly or hold steady next week.

Spot rates from Shanghai to Genoa increased four per cent to US$2,193 per 40-ft container and from Shanghai to Rotterdam they were up three per cent to US$2,028. Carriers on the Asia–Europe trade route are trying to push spot rates up by introducing higher FAK (freight all kinds) rates ranging from US$3,000 to US$3,650 per 40-ft box, effective Nov. 15, in an attempt to elevate spot rates before the start of the new annual contract negotiation season.

Drewry’s container forecaster expects the supply-demand balance to weaken in the next few quarters, particularly if normal Suez Canal transits resume.