On the major East-West trade routes (Transpacific, Transatlantic, and Asia-North Europe & Med), there have been significant sailing cancellations, reports Drewry.
Drewry’s Predictions
Drewry’s predictions and analysis of the container shipping market are as follows:
- Cancellations:
- Drewry forecasts that over the next five weeks, the majority of East-West sailing cancellations will occur on the Transpacific Eastbound route (47%), followed by the Transatlantic Westbound (28%) and Asia-North Europe & Mediterranean (25%) routes.
- Schedule Reliability:
- Schedule reliability is anticipated to decrease, with approximately 90% of vessels expected to operate on time.
- Container Rates:
- Container rates from Asia have continued to decline, reaching their lowest levels since 2024.
- Drewry’s World Container Index (WCI) Composite Index fell by 4% week-on-week to $2,168 per 40ft container.
- Transpacific rates dropped 4%, Asia-Europe/Mediterranean rates fell 5%, and Transatlantic rates declined 7%.
- Factors Affecting Rates:
- The decline in shipping rates is attributed to weaker demand and changes in carrier alliances, rather than tariff frontloading.
- A reduction in blank sailings (cancelled voyages), from 109 in March to 86 in April, is also contributing to this trend.
- Carrier Strategies:
- Carriers are cautiously attempting to implement General Rate Increases (GRIs) for April.
- However, overcapacity remains a concern due to increased competition and growing fleet capacity, as well as temporary capacity absorption related to Red Sea disruptions.
- This overcapacity is likely to exert continued downward pressure on rates.
- Market Uncertainty:
- The global shipping market is facing uncertainty due to potential US tariffs and discussions regarding proposed port call fees for Chinese-made vessels.
- Drewry advises cargo owners to remain vigilant and adapt their strategies to navigate these changing trade dynamics.
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Source: Drewry
