It seems that the spot rates would be range-bound for a while! The Drewry’s World Container Index took just a 1% hit for the week to end at US$1,741. A support at US$1,700 for the World Container Index (WCI) and an upside of US$1,800 for the resistance, seems to be emerging.
A commentary that Drewry has made is that of a stable outlook. This is slightly different from the commentary of the past couple of weeks- where it expected the rates in trade lanes other than the transatlantic to increase.
Yeah, the Transatlantic! This is where the downward action has been. Europe-US has fallen 5% to end at US$4,530, while US-Europe has dipped by as much to end at US$889. Both rates are now trading at June 2021 levels, a 23-month low. The other rates have been improving/ have been stable. Shanghai- Los Angeles which used to trail until Jan-2023 is now at a premium of 5%to the WCI. The other rates too have been moving sidewards, without a large uptick or drop over the past few weeks.
The WCI recorded its first-ever monthly gain in rates since Feb-2022, last month. There could be a medium-term comeback in demand, partly due to the trigger of “still higher” breakbulk rates and with new containerships poised to hit the water, near consistently, till 2024. The uptick in supply will be traded off by a possible acceptance of project cargo. But for now, it’s a wait-and-watch.
Author of the article: Gautham Krishnan
Gautham Krishnan is a logistics professional with Fluor Corporation, in the area of project logistics and analytics, and has worked in the areas of Project Management, Business Development and Government Consulting
