The surge in container rates continues to grip the container shipping industry. According to Drewry’s World Container Index, spot rates on the Asia-to-Europe route have risen again this week. This suggests that an end to the current surge in container rates is not yet in sight.
The latest 5 per cent increase brought the average rate for a 40-foot container between Shanghai and Rotterdam to $3,768. According to Drewry, the surge in container rates is the result of a combination of factors, including geopolitical tensions, longer shipping routes and a notably early start to the traditional peak season.
Normally, the greatest demand for container capacity does not pick up until later in the summer. This year, however, shipping lines and analysts are seeing importers placing their orders earlier. The uncertainty surrounding the situation in the Middle East and higher fuel prices are playing a significant role in this.
In addition, major discount campaigns by online shops and e-commerce platforms are creating extra demand for transport capacity. Importers want to replenish their stocks in good time for peak sales later this year, making available container space increasingly scarce.
The fact that the surge in container rates is not yet over is also evident from the new price announcements by various container shipping lines. Market leader MSC has announced a rate of $7,500 per 40-foot container for the first half of July on the Asia-Europe route.
CMA CGM is also raising its rates significantly. The French shipping line is targeting $6,300 per 40-foot container for the same period and has also announced a Peak Season Surcharge of $1,000 per TEU for the entire month of July.
Further information on international container logistics and shipping flows can be found on our pages covering ocean freight and container handling.
It is not only the route between Asia and Northern Europe that is seeing rising prices. Rates are also continuing to rise in other key shipping areas. According to Drewry, the average rate between Shanghai and Genoa now stands at $5,139 per container, an increase of 1 per cent.
Rates have also risen on the trans-Pacific routes. The average rate for a container from Shanghai to Los Angeles is now $4,683, whilst the rate to New York has risen to $5,870 per container. This means the global surge in container rates remains evident.
For importers and exporters, the ongoing rise in container rates means that timely planning remains crucial. Available capacity can quickly come under pressure if supply and demand become further unbalanced. Companies that rely on goods flows from Asia are therefore keeping a close eye on developments in the container market.
...Drewry’s World Container Index tracks the development of container rates on the world’s major trade routes on a weekly basis and is considered a key indicator for the container market?
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