- Freight rates keep falling after an early peak season, with the WCI down to $3,216 per FEU.
- Cape of Good Hope transits are now routine, as new ships enter service.
- Potential US east coast port strike delayed until January.
Freight rates are continuing their downward correction following the premature peak season and front-loading of volumes, leaving shipping lines facing an underwhelming winter, reports the Loadstar.
Freight rates pursuing downward correction
The Drewry World Container Index (WCI) this week continued its drastic downward trajectory, established in July, reaching $3,216 per feu, demonstrating that Cape of Good Hope transits are now a matter of routine. New tonnage is constantly hitting the water and the decision of whether port workers on the US east coast will strike again is delayed until January.
Following this 4% decrease, should rates continue their plunge, they will soon pass the $2,706 per feu threshold set in May, when chaotic trading patterns, brought on by adjustment to Cape sailing schedules, settled into a more mundane groove.
WCI’s Shanghai-Genoa showed the most pronounced drop, of 9%, this week, followed by Shanghai-Rotterdam, which fell 6%.
Drewry notes that the combined index is still some 126% above the pre-pandemic, 2019, average of $1,420. According to its modelling for 2025 and beyond, unveiled yesterday, this is likely to remain the case, with head of supply chain advisors Phillip Damas pointing to rates remaining above pre-pandemic levels even if there are no US port strikes in January.
Meanwhile, data from Linerlytica today suggests the vessel congestion on the US east coast, evident this time last week, has all but cleared. The group asserted that the advance of peak season, in expectation of strikes, was now in “reverse” and leaving a major hole in demand, just as new tonnage is still deluging the market – adding that carriers have missed their chance to address the issue.
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Source: The Loadstar
