According to the World Container Index (WCI) released by Drewry this week, which records spot prices paid in the past week, the freight rate for the Shanghai to Los Angeles route has increased by 16% compared to last week, at $3136 per 40 feet, while the freight rate for the Shanghai to New York route has risen significantly, by 19% compared to last week, reaching $4350 per 40 feet.
According to the Shanghai Container Freight Index, there may be further growth next week: the weekly freight rates for routes from Shanghai to West Coast base ports in the United States have increased by 31%, and for routes to East Coast base ports in the United States, they have increased by 22%.
With the latest developments in US China trade, Drury expects Pacific spot prices to continue rising in the coming week due to a shortage of transportation capacity.
At the same time, the sudden changes across the Pacific have not affected Asia Europe trade, and the situation in recent weeks has not changed – weak demand and weak prices. WCI’s Shanghai Rotterdam and Shanghai Genoa routes both fell 1% from the previous week, ending at $2035 per 40 feet and $2742 per 40 feet, respectively.
This week, major shipping companies have announced FAK rates for east-west routes starting from June 1st: CMA CGM has set a 40 foot container freight rate of $3300 for the Asia to Northern Europe route and $4400 for the Western Mediterranean route; Mediterranean Shipping announced a $3100 all inclusive shipping fee for a 40 foot container on its Asia to Northern Europe route; Yangming Shipping announced a new all inclusive freight rate, with a 40 foot container shipping cost of $3200 to Northern Europe and $5000 to Mediterranean ports.
Citigroup Inc. analyst Kaseedit Choonnawat stated in a report that due to the end of the 90 day tariff cuts between the two countries, it will overlap with the busiest period of the industry in mid August, with China accounting for around 40% of US container imports, and peak season demand may be pushed up.
Analysts of HSBC Holdings, including Parash Jain, wrote in a report that in the freight boom from China, more ships calling may lead to port congestion and supply chain bottlenecks, similar to what happened during the COVID-19 pandemic.
Deutsche Bank analyst Andy Chu wrote in a report, “We remain cautious in our long-term view of container shipping because we believe there will be a serious oversupply in the industry. We do acknowledge that container shipping inventory is cyclical and momentum driven, and as inventory is replenished, demand for US China trade routes will rebound in the near future
