Container rates are rising due to the World Cup, TikTok and Christmas

Container rates are soaring once again. According to the World Container Index compiled by consultancy Drewry, rates on the Shanghai-Rotterdam route rose by as much as 25 per cent this week. This marks a sharp continuation of the upward trend seen in recent weeks. It is striking that not only Christmas preparations, but also TikTok Shop, Amazon Prime Day and even the World Cup are contributing to the increasing demand for container capacity.

Whereas in early May the average rate for a 40-foot container between Shanghai and Rotterdam was $2,127, the average rate now stands at $3,579. Prices are also rising rapidly on other major trade routes. A container from Shanghai to Genoa now costs over $5,000.

Container rates rise due to early peak season

Traditionally, the peak season in container shipping begins during the summer months. Importers then build up their stocks for the Christmas period and other end-of-year events. This year, however, that peak season appears to be starting earlier than usual once again.

According to Drewry, many companies want to ship their goods earlier due to the geopolitical uncertainty in the Middle East. Container ships are still largely sailing via the Cape of Good Hope, resulting in longer transit times than via the Suez Canal. In addition, tensions surrounding Iran are causing further uncertainty and higher fuel costs.

Container rates get a boost from online shops

In addition to geopolitical developments, e-commerce platforms are also playing a significant role. Drewry observes that importers are replenishing their stocks earlier due to major sales events such as Amazon Prime Day and the continued expansion of TikTok Shop.

TikTok is increasingly evolving from a social media platform into a sales channel. TikTok Shop is also becoming available in the Netherlands, which is expected to result in additional flows of goods from Asia to Europe. This development further increases the demand for container capacity.

Further information on international container flows can be found on the page about sea freight and container handling.

Container rates are also rising to the United States

It is not only Europe that is seeing higher prices. On the Shanghai-Los Angeles route, rates rose by 31 per cent this week to an average of $4,565 per container. According to Drewry, the approaching World Cup is also playing a role in this. Organisers, suppliers and retailers are building up stocks for the major sporting event, causing demand for transport capacity to rise further.

At the same time, container shipping lines are attempting to keep the market tight by carefully managing capacity. This creates a situation where demand is growing faster than the available supply, which further supports container rates.

Container rates may rise further

Drewry expects container rates to rise further in the coming weeks. The combination of longer shipping routes, higher fuel prices, increasing e-commerce volumes, Christmas imports and the World Cup is creating exceptionally strong demand for container transport.

For importers and exporters, this means that timely planning is more important than ever. Those who wait too long to book run the risk of higher rates and limited availability of container capacity.

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