25 July 2024

Container Shipping Prices Show Slower Rise

Container Freight Rates Slow Down in Late May after Three Weeks of Double-Digit Increases

Container shipping rates on major global routes have slowed their rapid growth in the last week of May. According to the latest Drewry index, this trend is evident in services from Asia to Northern Europe, the Mediterranean, and both the West and East coasts of the United States. The evolution of these routes has placed the composite spot price index at $4,226 for a 40-foot container, a figure that is 4% higher than the previous week when increases were still in double digits.

Indeed, May has been marked by double-digit increases in freight rates, except for this last week. Drewry had already predicted a slowdown “in the coming months” after three weeks of significant rises. However, the month ends with rates being 151% higher than the same week last year and 198% higher than the pre-pandemic average spot rate (2019).

In this context, Lars Jensen, an analyst and CEO of Vespucci Maritime, highlights that despite the deceleration, spot prices for container shipping “continue to rise on major routes.” Jensen specifies that rates between Asia and Northern Europe have been slightly higher than at the start of the Red Sea crisis and are at a level “not seen since September 2022.” From Asia to the Mediterranean, however, they have not reached the peak of January 2024. “Interestingly, this development has yet to have any noticeable impact on the Pacific and Europe-Asia trades, nor for the North Atlantic trade,” he adds.

Regarding this week’s spot prices, routes from Shanghai (China) to New York (USA) lead in percentage increase, according to Drewry’s analysis. Specifically, they have risen by $372 week-on-week, or 6% more compared to the 13% increase they saw the previous week. Thus, freight rates for these services have reached $6,835 per 40-foot container, up from $6,463 the previous week.

Meanwhile, routes from Shanghai to Rotterdam (Netherlands) have risen by $271 compared to the $827 increase the previous week, marking a 5% rise versus the 20% increase in mid-May. Therefore, freight rates in this case stand at $5,270 per 40-foot container.

Links between the Chinese port, the world’s busiest in container traffic, and Genoa (Italy) have increased by 4% week-on-week. The previous week, the increase was 15%. They are closing the month at $5,693, only $199 more than the previous week. Spot prices from Shanghai to the US East Coast (Los Angeles) exceed $5,390 this week, 2% more than the previous week when the increase was nearly 20%.