Drewry’s weekly World Container Index (WCI) increased 41% to $3,527 per feu yesterday, the second highest leap dollars-wise since the index was created, with the busy transpacific leading the way once again amid a brief trade detente between the world’s two largest economies, the US and China. Rival spot index, the Shanghai Container Freight Index, published today, increased a more moderate 8% to 2240.35 points.
Drewry’s WCI has increased 70% in the last four weeks, as president Donald Trump’s pause on import tariffs led to a resumption of US-bound traffic after the initial collapse of transpacific volumes.
Freight rates from Shanghai to Los Angeles have jumped 57% to $5,876 per feu in the past week and 117% since May 8. Spot rates to New York have risen 39% in the past week and 96% in the past four weeks.
Judah Levine, head of research at Freightos, a box booking platform, suggested that the sharper climb for west coast rates may reflect shippers’ need for speed and preference for a shorter journey as they frontload ahead of the tariff deadline.
The market surge has also spilled over into the charter market
Carriers have likewise scheduled record capacity to the west coast through July to serve this anticipated demand, Levine pointed out.
“The surge in China-US volumes since mid-May is already leading to significant congestion at some major ports in China and in Singapore and other tranship hubs as well. Some observers are concerned that this jump in demand could overwhelm the ports of LA and Long Beach in a few weeks, though port officials say they are ready to handle the volume increase,” Levine said.
Jefferies, an investment bank, commented in a note to clients on the transpacific situation: “Capacity remains constrained due to previous vessel re-routing, and it will likely take until late June/early July for this to be alleviated.”
Freight rates from Shanghai to Rotterdam and Genoa have also risen in the past week, by 32% and 38%, respectively, according to Drewry.
Sea-Intelligence, a Danish container shipping consultancy, noted in a report published on Sunday that on the transpacific tradelane to the west coast, capacity growth looks set to be in excess of 30% year-on-year in five of the next 11 weeks.
Linerlytica, a rival Asian consultancy, noted: “The market surge has also spilled over into the charter market where vessel availability is very low and carriers are still seeking tonnage to take advantage of the large rate hikes.”
Linerlytica said there remains little clarity on where the market heads from here as new capacity injections to the US starts to dampen the rate momentum, while uncertainty remains over the sustainability of the volume surge after the 90 day tariff truce ends.
Drewry’s Container Forecaster, meanwhile, expects the supply-demand balance to weaken again in the second half, which will cause spot rates to decline again in the second half of this year.
“The volatility and timing of rate changes will depend on the outcome of legal challenges to Trump’s tariffs and on capacity changes related to the introduction of the US penalties on Chinese ships, which are uncertain,” Drewry maintained.
Source: Drewry
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