Freight Rates Decline Across Major Routes Amid Capacity Increases
The latest Drewry World Container Index (WCI), released on March 13, 2025, shows a continued decline in container freight rates, with the composite index falling by 7% to $2,368 per 40ft container. This marks the lowest level since January 2024, although rates remain significantly higher than pre-pandemic levels.
Freight Rates Down 77% From Pandemic Peak
Despite this recent drop, the index is still 67% above the 2019 average of $1,420 per 40ft container, showing that while the extreme highs of the pandemic era have subsided, freight rates remain elevated compared to historical norms. The latest composite index figure is also 77% below the record high of $10,377 in September 2021, when global shipping bottlenecks drove costs to unprecedented levels.
Year-to-date, the average composite index stands at $3,205 per 40ft container, which is $321 higher than the 10-year average of $2,884—a figure skewed by the massive rate surges of 2020-2022.
Major Trade Lanes See Significant Rate Reductions
The downward trend in freight rates is evident across key East-West trade routes, with Shanghai-origin shipments seeing some of the steepest declines:
- Shanghai to Genoa: Down 11% ($412) to $3,333 per 40ft container
- Shanghai to Los Angeles: Down 8% ($260) to $2,906 per 40ft container
- Shanghai to New York: Down 7% ($282) to $4,038 per 40ft container
- Shanghai to Rotterdam: Down 5% ($124) to $2,512 per 40ft container
Meanwhile, some routes experienced marginal increases:
- Rotterdam to Shanghai: Up 1% to $490 per 40ft container
- New York to Rotterdam: Up 1% to $854 per 40ft container
- Rotterdam to New York: Up 1% to $2,373 per 40ft container
- Los Angeles to Shanghai: Remained unchanged
What’s Driving the Decline?
Several factors contribute to the ongoing drop in container freight rates:
- Increasing shipping capacity: More vessels entering service, along with better utilization of existing fleet capacity, is helping ease pricing pressures.
- Lower demand growth: While global trade remains steady, the post-pandemic surge in demand for goods has cooled, reducing the strain on shipping networks.
- Market normalization: As supply chain bottlenecks continue to ease, ocean carriers are facing a more competitive pricing environment, driving rates lower.
Outlook: Further Declines Expected
According to Drewry, the outlook for freight rates in the coming weeks suggests further decreases as shipping lines add capacity and demand stabilizes. However, geopolitical risks, fuel costs, and port congestion could still impact pricing fluctuations in the short term.
For companies navigating these market shifts, keeping a close eye on index-linked contracts and spot rate developments will be crucial for cost-effective freight procurement.
Source: drewry
