A string of General Rate Increases (GRIs) for Freight All Kinds (FAK) rates, the added effect of the Canadian port strikes and the cutting down of capacities have been playing into China-US rates.
The latest weekly action saw the Shanghai-Los Angeles rates (China-US West Coast) sear past the US$2,000 mark, to end at US$2,072, a figure which was last seen by the trade lane over six months back.
The Shanghai- New York trade lane rates too breached the US$3,000 mark on the upside, appreciating 5% to end at US$3,049, again at a six-month high. The duo powered the Drewry World Container Index (WCI) up by 2.5% to a level of US$1,576. The WCI has now improved by US$102, over the past three weeks (about a 7% rise in percentage terms).
In a week that saw muted action from the other trade lanes, the Transatlantic trade lane prices nosedived further to US$1,590 and have lost 77% of their value over the past year, in line with the Composite index.
The performance is worse than the Transpacific: China-US counterparts, but still better than the China-Mediterranean and China-Europe trade lanes which have both lost over 80%. The former still languishes at a three-year low, settling below the US$1,900 mark as per the latest quote.
While Drewry has maintained its commentary on declining rates in the East-West trade, the prime focus will be to understand if this is a sustained rise unlike the previous two instances of GRIs seen early this year. As the US back-to-school season knocks the doors, inventory management and ordering will also play a key role in the rate action.
Spot freight rates by major route – Drewry’s assessment across eight major East-West trades:
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.
