By Gavin van Marle – Container freight spot rates remained fairly stable this week as China’s supply chains gradually resumed operations following the New Year holiday.
Although some offices and factories reopened this week, the flow of trucks in and out of China’s ports takes time to return to normal. As truck drivers resume work, cargo movement remains limited.
As a result, spot freight rates on primary east-west routes stayed largely unchanged, following last week’s trend.
Drewry’s World Container Index (WCI) reported a 1% weekly decline in its Shanghai-Rotterdam leg, ending at $2,094 per 40ft container, while the Shanghai-Genoa leg dropped 2%, finishing at $2,826 per 40ft.
With more export cargo expected to reach China’s ports next week, it remains uncertain if this will be enough to lift spot rates to Europe, especially after seven weeks of continuous declines.
“Volumes usually bounce back in March as factories across Asia reopen, but rates may still face downward pressure due to increased capacity. Therefore, we expect spot rates on this trade to decrease in the coming weeks,” Drewry noted.
However, Linerlytica data shows that five sailings from Asia to the Mediterranean and six from Asia to North Europe are set to be canceled next week. Carriers are hopeful that managing capacity will help stabilize prices.
Today’s Shanghai Containerised Freight Index (SCFI), which took a break last week, showed a 4% increase in the Shanghai-North Europe base port leg, now at $1,420 per teu, and a 6% rise in the Shanghai-Mediterranean base port route, reaching $2,305 per teu.
The SCFI aggregates quoted freight rates for the upcoming week and often predicts trends for the WCI.
If this trend continues, today’s SCFI indicates strengthening rates on transpacific routes, with the Shanghai-US west coast leg up 4% to $1,857 per 40ft and the Shanghai-US east coast leg rising 7% to $2,691 per 40ft.
This week’s WCI for transpacific rates mirrored this trend: the Shanghai-Los Angeles route fell 1% to $2,191 per 40ft, while the Shanghai-New York leg remained steady at $2,771 per 40ft.
There’s still uncertainty about how well the general rate increases of $2,000 to $3,000 per 40ft, set to take effect on March 1, will hold.
Moreover, uncertainty surrounding potential tariffs on goods transported along transpacific routes is likely to influence demand in the upcoming month. Analysts at Maritime Strategies International (MSI) mentioned that rates on both trades could drop another 25% to 30% due to excess capacity.
“Overall, spot freight rates from Asia to North Europe and the US west coast have decreased about 15% in the last month. Most of this drop is attributed to seasonal trends related to the lunar new year, but further declines are expected to be driven by overcapacity,” MSI noted.
“Looking ahead, we predict that rates will decrease further in 2026, stabilizing around $1,000 per teu for the Asia-North Europe trade and $1,500 per 40ft for the US west coast.”
“There may be some potential for US-bound rates to rise if new tariffs or investigations lead to increased frontloading,” MSI pointed out this week.