Drewry’s WCI Composite Index Reflects Market Pressure

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Mfame Editor
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  • Freight Rates Decline Due to Post-CNY Slowdown.
  • March Rate Hike Faces Resistance from Weak Demand.
  • Improved Schedule Reliability Expected Over Next Five Weeks.

The Cancelled Sailings Tracker gives a weekly overview of blank sailings published by each shipping alliance against the total scheduled sailings, reports Drewry.

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The Container Capacity Weekly Insight provides trade route and alliance-level detailed analysis, including port waiting times for Los Angeles and Long Beach, as well as year-on-year comparisons.

Cancellation Rates for Key East-West Trade Lanes

During weeks 8 (17 Feb- 23 Feb) and 12 (17 Mar- 23 Mar), 51 of 719 planned sailings in the major East-West trade lanes — Transpacific, Transatlantic, and Asia-North Europe & Med — were cancelled, a 7% cancellation rate.

Forecasted Cancellation Trends by Route

Drewry expects, in the coming five weeks, cancellations to be mostly in:

  1. Transpacific Eastbound: 49%
  2. Asia-North Europe & Med: 31%
  3. Transatlantic Westbound: 20%

Schedule Reliability Forecast

Schedule reliability will be better, with 93% of ships predicted to run on schedule. MSC will lead the way with a 97% on-time rate, although this may be altered if additional blank sailings are added to control overcapacity.

Freight Rates and Seasonal Trends

Freight rates remain in decline even after blank sailings went up. Reduced demand caused by the seasonal post-Chinese New Year slowdown is propelling rates down. Cancelled sailings rose from 104 to 133 in January and February, respectively, but those reductions are not expected to make up for dwindling demand.

Rate Hike Announcement and Market Outlook

Carriers are implementing a 1 March rate increase, but soft demand and increasing capacity could blunt its effectiveness. March blank sailings are expected to decrease 35% month-to-month, which would continue to apply downward pressure to rates unless there are additional cuts in capacity.

Drewry’s WCI Composite Index Trends

On February 13, Drewry’s WCI Composite Index dropped 5% week-on-week to $3,095 per 40ft container, a 17% year-on-year decline. Rate changes by trade lane are:

  1. Asia-Europe/Med: Down 4%
  2. Transpacific: Down 6%
  3. Transatlantic: Stable

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Source: Drewry