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Ocean container spot rates continued to decline this week but port congestion in US East Coast and Europe slowing the rate fall, while reefer rates show resilience
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Drewry’s WCI composite index rate is now 67% below the peak of US$10,377 reached in September 2021
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Freightos says China-North Europe volumes have eased 6% y-o-y and rates have fallen 64% since January as demand fell, but congestion kept rates 4.5 times above 2019 levels
Ocean spot rates continued their decline on the major trade lanes from Asia this week as demand drops, but analysts say port congestion on the US East Coast and at many major European hubs may be slowing the rate fall, with reefer rates resilient to the price dip than dry containers.
Drewry, the UK-based supply chain advisors, said its composite World Container index decreased 3% this week to $3,383 per 40-foot container, down 66% from the same week last year.
It was the 34th consecutive weekly dip since sport rates began to retreat in late January,, prompting carriers to resort to blank sailings in the past two months to try and arrest the price drop.
The WCI composite index rate is now 67% below the peak of US$10,377 reached in September 2021. It is 10% lower than the 5-year average of $3,740, indicating a return to more normal prices, but remains 138% higher than average 2019 (pre-pandemic) rates of $1,420.
On another platform, Freightos, said its Baltic Index showed Asia-US West Coast spot prices (FBX01 Daily) fell 9% to $2,492/FEU, taking the spot rate 86% lower than at the same time last year. Asia-US East Coast prices (FBX03 Daily) fell 5% to $5,719/FEU and are 72% lower than for this week last year.
Amid the spot rate slide, refrigerated (reefer) container rates are proving more resilient than dry container prices on exports from North Europe, Oslo-based Xeneta said in an update.
“Just as the spot rates for dry containers have been falling over the past few months, so have spot rates for reefers. Though on most trades, the reefer spot rate decline is slower than for standard containers,” Xeneta said.
The market analyst said rates for reefer exports on all the main trades out of North Europe have fallen from three months ago, but none was lower than the level on October 18, 2021. Only one trade has seen reefer rates drop more than those for dry boxes, Xeneta said.
From North Europe to the Far East, the average spot rate for a 40-foot reefer has fallen 4.4% since mid-July to $5,230.
Xeneta said there is higher demand for reefers going to the Far East, in contrast to dry containers, where the eastward journey is the backhaul. The freight rate for dry 40-ft containers has fallen 10.2% in the three months since mid-July to $880/ FEU.
Freightos head of research Judah Levine said on October 19 that the congestion moving from the traditionally busier US West Coast to the East Coast sprang from the significant shift of volumes from west to east as shippers sought to avoid a repeat of last year’s delays and labor dispute on the West Coast.
“So, while volumes have decreased and Asia-US East Coast rates have declined 67% since April, they remain 111% higher than in 2019,” Levine said.
“By comparison, as congestion has eased and more capacity circulates on the West Coast, Asia- US West Coast prices have fallen 84% since April and are only 82% higher than this week in 2019.”
From January through August, China-North Europe volumes declined 6% y-o-y, and rates have fallen 64% since the start of the year with falling demand. But persistent congestion has kept rates more than 4.5 times higher than in 2019, Levine said.
Transatlantic rates have fallen 15% since August, but port congestion and possibly more resilient demand have kept rates even with the start of the year at about $7,000/FEU, a level 3.5 times higher than in 2019, he said.
On October 19, Drewry’s WCI composite index showed rates on Shanghai- Los Angeles slid 5% or $122 to $2,497/FEU. Spot rates on Shanghai-Genoa and Shanghai-Rotterdam fell 3% each to $4,614 and $4,436/FEU. Likewise, Rotterdam-Shanghai dipped 3% to $887/FEU.
