Weak market pushes container rates down

The Drewry World Container Index (WCI) fell one per cent to US$1,933 per 40-ft container for the fifth consecutive week, primarily due to a drop in rates on the Transpacific and Asia–Europe trade routes.

Spot rates from Shanghai to major U.S. destinations declined slightly due to low cargo volume, with spot rates to Los Angeles and New York falling a percentage point to US$2,214 and US$2,800 per 40-ft container, respectively.

In response to the weak demand ahead of factory closures, carriers managed capacity by announcing 57 blank sailings over the next two weeks on the Transpacific East and West Coasts trade lane, much higher than in previous years, according to Drewry’s Container Capacity Insight. Hence, Drewry expects spot rates on this trade to decline slightly in the coming weeks.

Spot rates on Asia–Europe trade routes continued to decline, with rates on Shanghai–Rotterdam falling two per cent to US$2,127 per 40-ft container and those on Shanghai–Genoa dropping three per cent to US$2,965. According to Container Capacity Insight, carriers have announced 24 blank sailings on the Asia–Europe/Med trade route over the next two weeks due to the ongoing market volatility and Chinese New Year factory closures. Drewry expects spot rates on this trade to decrease slightly in the coming weeks.

Container spot rates are falling sharply, which indicates the market is weak, contrary to the general expectation of rising demand and increasing spot rates before the Chinese New Year. This year, rates peaked earlier than usual, and if the normal seasonal pattern continues, Drewry said they could decrease further.