Container rates on the important shipping route between Asia and Europe have risen slightly again for the first time since March. According to consultant Drewry's World Container Index, the average spot rate for a container from Shanghai to Rotterdam rose by 2 per cent this week.
With this, the container market seems to be cautiously stabilising after weeks of falling prices. Still, the outlook remains uncertain due to overcapacity and weak demand for container transport.
The average rate for a 40-foot container on the Shanghai-Rotterdam route came to $2,170 this week. Last week, it was still at $2,127.
The increase follows a period when container rates were under pressure. In March, prices still peaked at $2,552 due to tensions in the Middle East, but a real explosion in rates did not materialise.
The current market is very different from the corona period, when container rates rose to extreme levels of $15,000 to even $20,000 per container.
...container rates are strongly influenced by demand, available shipping capacity and geopolitical tensions?
Despite the slight increase, the container market continues to suffer from structural overcapacity. Shipping companies have added many new ships in recent years, while transport demand currently remains relatively weak.
To support the market, container shipping companies are temporarily withdrawing services via so-called blank sailings. This attempts to better align supply with demand.
Major shipping lines such as MSC, CMA CGM and Hapag-Lloyd hope to boost prices further with new general price increases. However, analysts doubt whether the market is strong enough to actually support those increases.
Developments in the Middle East are keeping the market tense. Disruptions around the Strait of Hormuz continue to create uncertainty in global trade and affect expectations for container traffic.
At the same time, rates are still higher than last year around the same period. Back then, prices were actually under pressure due to uncertainty about US import duties.
Not only on the Asia-Europe route did rates rise. Price increases were also reported on other major shipping areas, such as the transpacific route between Shanghai and Los Angeles.
For logistics parties, flexibility remains essential in this volatile market. Read more about international container flows on the ocean freight page.
Whether container rates rise further or come under pressure again in the coming weeks depends mainly on the balance between demand, capacity and geopolitical developments.