Five years after the COVID-19 shipping crisis, volatility in container freight rates is still rocking supply chains—especially on East-West routes—leaving shippers exposed to big cost swings and financial risk.
Spot rates on global container routes haven’t settled since the pandemic. According to Drewry’s Container Freight Rate Insight, East-West trade lanes—spanning transpacific, Asia-Europe, and transatlantic corridors—are still the most unpredictable, while intra-Asia routes remain relatively calm. For importers and exporters relying on short-term contracts or spot deals, that volatility carries heavy consequences.
Between May 2023 and May 2025, the standard deviation of spot container rates on the East-West routes hit around $1,400 per 40ft container. That means shippers could easily see their freight bills swing by that amount without warning. For those moving high volumes or lower-margin goods, that unpredictability can crush profits.
Red Sea, Tariffs, and Sudden Rate Swings
Several factors are fueling the turbulence. Disruptions in the Red Sea, rising insurance premiums due to conflict zones near the Gulf of Aden and Iran, tariff uncertainties, and capacity adjustments are all adding pressure.
The transpacific route from China to the U.S. West Coast illustrates the scale of fluctuation. Spot rates from Shanghai to Los Angeles halved between January and March 2025—only to double again by June. This sudden lurch in pricing, often triggered by news of new tariffs or capacity withdrawals, creates chaos in planning and budgeting.
For companies using spot agreements, the financial risk includes:
- Unexpected changes in landed costs for importers
- Exporters facing negative margins or losing price competitiveness
- Internal cost overruns blamed on logistics teams
And while larger shippers may have annual contracts offering some stability, they’re not immune. Surcharges linked to Red Sea detours or deviation fees began appearing in late 2023 and have continued into 2025, even for contract holders.
Intra-Asia: The Exception to the Rule
Contrast that with the intra-Asia market, where rates are not only lower but far more stable. Drewry’s index shows intra-Asia spot rates never exceeded $2,000 per container—even during COVID highs—while East-West rates surged to $11,000.
This relative calm helps explain the surge in intra-Asia trade, especially for manufacturing hubs seeking predictable transport costs. The standard deviation on these routes is about seven times lower than on East-West lanes. For shippers operating within Asia, that’s a significant cushion against cost volatility.
North-South Routes Also See Moderate Instability
Shippers operating between the Northern and Southern Hemispheres are also exposed to variable freight costs. Drewry’s proprietary data indicates a noticeable, though less extreme, level of spot-rate fluctuation on North-South trades—adding another layer of complexity for global logistics teams managing diverse networks.
Strategies to Mitigate the Risk
So how should shippers respond? According to Drewry consultants, mitigation strategies fall into two categories: established practices and emerging solutions.
Established techniques include:
- Shifting from spot to longer-term contracts
- Strengthening carrier partnerships through mutual commitments
- Tightening contract terms to limit unilateral surcharge imposition
Meanwhile, emerging techniques are gaining traction, especially as digitalization and analytics evolve. These include:
- Using freight rate futures to hedge spot market exposure
- Running rate forecasts and scenario planning for key shipping lanes
- Re-evaluating sourcing strategies to reduce logistics or tariff risk
Some companies are even mapping alternate sourcing regions to minimize exposure to volatile or high-risk trade lanes.
Shippers Under Pressure as Top Brass Pay Attention
There’s a human side to all this volatility. Logistics managers are increasingly under scrutiny from senior leadership when freight budgets get blown apart by unpredictable rate hikes. For products with narrow margins, an additional $2,000 in shipping costs per container can be the difference between profit and loss.
It’s not just about cost control—it’s about resilience. Freight rate volatility is likely here to stay, driven by geopolitical instability, climate impacts on shipping lanes, and fluctuating global demand. Whether you’re shipping smartphones or solar panels, ignoring the data isn’t an option anymore.
Source: drewry
