Container shipping rates cool but still remain high
September 25, 2021: The boiling container shipping market continued to slow quietly, according to two closely watched indicators, but rates were double the period a year earlier.
The Drewry Global Composite Index (WCI), after 22 straight weeks of recovery, remained stable during the week ending September 23. The WCI index stood at $ 10,377 per 40-foot container (FEU), up 299% from the same week last year.
The WCI’s year-to-date composite average was $ 6,888 per FEU, $ 4,492 more than the five-year average of $ 2,396 per FEU, according to the Release by Drewry.
Spot rates from New York to Rotterdam fell 8%, or $ 91, to $ 1,107 per FIRE. Rates from Los Angeles to Shanghai and Shanghai to New York fell 3% and 2% to $ 1,404 and $ 15,849 per FIRE respectively, the statement added. Rates on Shanghai-Rotterdam, Rotterdam-Shanghai, Shanghai-Los Angeles and Rotterdam-New York remained stable at the level of previous weeks.
Drewry expects rates to remain stable over the coming week.
Lars Jensen, a leading expert in the container shipping industry, in his last post on LinkedIn said that “rate hikes have slowed over the past two weeks, but from a macro perspective they’re not quite stalled yet.”
Dr Subrata K Behera, Port and Container Research Director Drewry said peaks in container freight rates would subside over the next few quarters, but rates would remain high for some time to come. “What we can say now is that the rate of increase is going to slow down,” Dr Behera told ITLN.
The spot freight rate for containerized cargo from Northern Europe to the US east coast was 210% higher than last year (July 1 – September 23), according to BIMCO.
BIMCO chief shipping analyst Peter Sand said in his latest weekly report that transatlantic average spot rates hit $ 5,798 per FIRE on July 1 before stagnating just south of $ 6,000 at 5 $ 893 per FIRE on September 23.
Dr Behera added that tariff freezes announced by shipping companies like CMA CGM and Hapag Llyod are not uniform. “The current containerized freight scenario is the result of a number of issues,” added Dr Behera.
Dr Behera said the move towards longer-term agreements could potentially give shippers and shipping companies visibility into future profits. Such offers were not offered by shipping companies. With long-term agreements, manufacturers can easily plan their production and delivery schedule, ”added Dr Behera.