According to Drewry, the latest WCI composite index stands at $4,168 per 40ft container, a significant 60% drop from its peak in 2021. Despite this decline, rates remain 193% above the pre-pandemic average of 2019, indicating continued market volatility. The East-West trade lanes are witnessing considerable rate fluctuations as shippers adjust routes in response to shifting demand dynamics.
Significant Declines on Key Routes
Freight rates on major routes, such as Shanghai to New York, Rotterdam, and Genoa, have seen sharp declines, with rates dropping up to 21%. This reduction is largely driven by lower demand, especially on the East Coast routes, as shippers reroute cargo to avoid potential disruptions, such as the planned ILA strike.
Market Shifts and Rate Adjustments
The spot rates between major ports reflect ongoing adjustments in the global shipping market. For example, rates from New York to Rotterdam and Rotterdam to Shanghai fell slightly, reflecting softer demand. Meanwhile, a modest 1% rate increase was observed from Los Angeles to Shanghai, highlighting selective upticks amid broader downward trends.
Expectations for Further Declines
Drewry anticipates that East-West freight rates will continue to drop in the coming weeks due to weak demand across major trade lanes. The ongoing shifts in shipping patterns and port preferences, driven by operational challenges and economic factors, are likely to sustain this downward pressure on rates.
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Source: Drewry
