This decline indicates some market stabilization and is a sign of relief for importers and exporters facing high costs and logistical challenges.
Spot rates for shipping containers fell for the first time in nearly three months, indicating a potential cooling in demand after U.S. tariffs on Chinese goods and other trade disruptions caused an early peak season for restocking.
This recent drop may signal market stabilization and much-needed relief to importers and exporters who have been facing challenges in logistics and high shipping costs.
The Drewry World Container Index, which tracks eight major trade routes, dropped 2.2% to $5,806 for a 40-foot unit, ending a 12-week-long increase in spot rates. This rate is still three times higher than at the end of 2023 when ships diverted from the Red Sea due to Houthi attacks.
Spot rates increased unexpectedly in the second quarter due to strong U.S. demand for goods. Importers rushed to stock up ahead of anticipated higher American tariffs on Chinese products and growing concerns about a potential strike by dockworkers on the East and Gulf Coasts later this year.
The Shanghai-to-Los Angeles spot rate dropped for the second week, down 4.9% to $6,934. According to Drewry's data, the Shanghai-to-Rotterdam spot rate was stable at $8,260.
These trends are consistent with short-term container rates from Freightos, a cargo-booking platform. Spot rates for Asia-U.S. West Coast services fell 4% to $7,738, while rates to northern Europe from Asia dropped 2% to $8,420.
The Port of Los Angeles and Long Beach, the busiest U.S. maritime trade gateway, saw significant increases in container volumes in the first half of 2024. Europe’s largest ports, Rotterdam and Antwerp-Bruges, also reported solid growth.
Capacity issues due to Red Sea unrest and vessel diversions around the Cape of Good Hope caused port congestion at key hubs like Singapore. However, wait times for berth space in Singapore have decreased.
Judah Levine, head of research at Freightos, indicated during a webcast that supply and demand in the shipping market are nearing a balance not seen in recent months.
“Taken all together, the additional capacity in the main trade lanes from improving congestion and from carriers adding more services, combined with demand which might be peaking just now or in the next few weeks, these could be factors for some speculation in the market that spot rates may have already reached their peak,” Levine said.
He noted that a series of peak season surcharges and general rate increases by freight shipping lines from Asia to the U.S. and Europe appears to have paused, at least through August.
Daily quoted spot rates are declining, and there are reports that carriers are offering rate reductions, Levine added.
Please contact one of our trade professionals for more information about this story and how this drop might affect your import business.