The maritime and logistics industry is witnessing a notable surge in freight rates, as the composite index increased by 4% to reach $4,226 per 40ft container this week. This represents a staggering 151% increase compared to the same period last year. This rise underscores the persistent volatility in the global shipping market, driven by a complex interplay of supply chain disruptions and heightened demand.
The latest data from the Drewry World Container Index (WCI) reveals that the current rate is a whopping 198% higher than the pre-pandemic average of $1,420 recorded in 2019. The year-to-date average composite index now stands at $3,323 per 40ft container, which is $598 above the 10-year average rate of $2,725. This decade-long average, however, has been significantly skewed by the unprecedented conditions during the 2020-2022 COVID period.
Breaking down the figures further, freight rates from Shanghai to key global destinations have seen notable increases. For instance, the cost to ship a 40ft container from Shanghai to New York climbed 6%, amounting to an additional $372, bringing the total to $6,835. Similarly, the Shanghai to Rotterdam route experienced a 5% rise, adding $271 to reach $5,270 per FEU (Forty-foot Equivalent Unit). The Shanghai to Genoa route also saw a 4% hike, increasing by $199 to hit $5,693 per container. Even the Shanghai to Los Angeles route, a crucial link in trans-Pacific trade, rose by 2% or $113, reaching $5,390 per FEU.
In contrast, the rates for shipments from Rotterdam to Shanghai saw a marginal uptick of 1%, an increase of just $4, bringing the cost to $677 per 40ft box. Meanwhile, the Rotterdam to New York route experienced a slight decrease of 1%, dropping by $19 to settle at $2,222 per container. Interestingly, freight rates on routes from Los Angeles to Shanghai and New York to Rotterdam have remained stable, indicating some regional variations in market dynamics.
Drewry’s analysts anticipate that freight rates ex-China are likely to continue their upward trajectory in the coming weeks, spurred by the onset of the early peak season. This period traditionally sees a ramp-up in shipping activity as retailers and manufacturers gear up for increased consumer demand.
Spot freight rates by major route
An assessment across eight major East-West trades:
The current landscape in global freight rates reflects the broader economic trends and ongoing challenges in the supply chain. The significant increases highlight the pressures faced by shippers and the ripple effects across various industries reliant on timely and cost-effective logistics. As the market navigates these turbulent waters, stakeholders will need to stay agile and informed to mitigate the impacts of these shifts.
Source:drewry