Container rates up for second straight week

The Drewry World Container Index (WCI) increased three per cent to US$1,746 per 40-ft container for the week of Oct. 20-24, the second straight week of increases following a prolonged 17-week decline.

Spot rates from Shanghai to Los Angeles increased four per cent to US$2,290 per 40-ft container and those to New York rose six per cent to US$3,420. Drewry expects rates to increase slightly next week due to the general rate increases (GRIs) implemented in mid-October. Drewry said carriers are planning to implement new GRIs on Nov. 1 and 15 to secure higher prices before the effect of the current rate increases completely fades away.

Spot rates on the Asia–Europe route recorded further gains this week. The rate from Shanghai to Rotterdam jumped four per cent to US$1,736 per 40-ft container and from Shanghai to Genoa rose two per cent to US$1,855.

Drewry expects a slight increase in rates next week, as carriers come under increasing pressure to lift prices ahead of the annual contract negotiation season. To cap the rate slide in the future, carriers have announced new FAK (freight all kinds) rates effective Nov. 1, ranging between US$2,600 and US$2,700 per 40-ft container.

Drewry’s Container Forecaster expects the supply-demand balance to weaken in the next few quarters, which will cause spot rates to contract.