Lloyd's List is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call UK support at +44 (0)20 3377 3996 / APAC support at +65 6508 2430

Printed By

UsernamePublicRestriction

Container spot freight rates continue downward trend

Some indices have now fallen by more than a fifth from their previous peaks

Spot rates normally head upwards at the start of the peak season as demand increases. But high inflation is taking its toll and the outlook remains uncertain

CONTAINER spot freight rates continued to ease this week as macroeconomics and geopolitics cloud the outlook for the second half of the year.

The Shanghai Containerised Freight Index fell back 1.7% and now stands at over a fifth lower than it did at its peak in January.

The comprehensive index moved back to 4,074 points, a level not seen since this time in the past year.

This week’s decline was driven by a 3.3% fall on the Asia-US west coast trade, which dropped $233 to $6,883 per feu, the first time it has fallen below $7,000 per feu this year.

 

 

Drewry’s World Container Index also reported falls this week, dropping 0.7% to $6,998.8 per feu, down 21% on where it stood in the corresponding week of 2021.

The average composite index of the WCI year-to-date is $8,321 per feu, which is still $4,788 higher than the five-year average of $3,533 per feu.

The decline in spot rates comes at a time of year when rates usually start to pick up again as demand builds during the traditional peak season.

Figures from Container Trades Statistics indicate demand is continuing to ease. May volume figures, the latest for which data is available, show liftings were down 2.8% when compared to May 2021, although the numbers were up on April.

“On the Asia to North America trade the switch between imports to the US west coast and US east coast continues to show how customers have chosen to avoid risks of any potential congestion on the west coast,” CTS said. “The US west coast imports are 13% down year on year and 8% down year to date, while US east coast is up 10% year on year and 14.2% year to date.”

The global market continued to reflect a “softening of overall demand”, CTS said. But it added that this was yet to be fully reflected in rates due to continued supply chain congestion.

“European ports are beginning to reflect similar congestion issues caused by strikes or labour shortages. While these issues persist, volume declines are not being reflected in the Global Price Index. The pressures on freight rates are likely to continue for the foreseeable future.”

With inflation rates now running at close to 10% in major consuming economies, and with continued uncertainty caused by the war in Ukraine, it remains to be seen whether lower demand will lead to further falls in rates or whether snarled up supply chains will conspire to keep them at their still elevated levels.

Related Content

Topics

UsernamePublicRestriction

Register

LL1141626

Ask The Analyst

Please Note: You can also Click below Link for Ask the Analyst
Ask The Analyst

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel