Global Container Freight Rates Rise for Second Consecutive Week

Global container freight rates increased for the second consecutive week as carriers restricted capacity, particularly on the trans-Pacific route. Average freight rates per 40-foot container rose by 1% to $4,339.

On the trans-Pacific route, the Shanghai-New York freight rate increased by 10% to $8,706, while the Shanghai-Los Angeles route rose by 6% to $6,244. Carriers’ continued efforts to limit capacity through blank sailings contributed to keeping freight rates high.

In contrast, freight rates on the Asia-Europe route declined. Prices on the Shanghai-Genoa route fell by 8% to $5,080, while rates on the Shanghai-Rotterdam route decreased by 5% to $4,425. Although new freight rates on the Asia-Mediterranean route were announced at $6,700-$7,100, weakening demand is raising questions over the sustainability of these levels.

Pressure on supply chains in global container shipping continues due to security problems around the Suez Canal and Strait of Hormuz, restrictions on the Panama Canal, congestion at Asian ports and low water levels on the Rhine River.

The prolonged disruptions in the Middle East are also being reflected in long-term freight contracts, with notable increases in contract rates from the Far East to the U.S. and Europe in recent months. However, the much stronger rise in the spot market compared with long-term contracts is widening the price gap between carriers and shippers.

In this environment, carriers are expected to continue keeping capacity tight, while shippers are expected to turn to shorter-term agreements instead of high-priced long-term contracts.