Container Freight Indices Diverge Sharply Ahead of November GRIs

By Gavin van Marle (The Loadstar) – It was another week of confused signals on container spot freight rates from the main indices – the Shanghai Containerised Freight Index (SCFI) continuing to show considerable variance against indices powered by Drewry, Xeneta and Freightos.

In particular, the SCFI reading for its Shanghai-Mediterranean base port leg this week, which saw the spot rate gain 12% week on week, to hit $3,966 per 40ft, was a significant outlier.

It meant the SCFI spread on rates between the Mediterranean and North Europe ex-Asia was some was almost $1,300 per 40ft, equivalent to 50% higher, with today’s Shanghai-North Europe base port reading at $2,698 per 40ft, up 8% week on week.

In contrast, this week’s World Container Index (WCI) from Drewry gained 3% on its Shanghai-Rotterdam leg last week, to finish at $1,795 per 40ft, while its Shanghai-Genoa route was up 5%, to hit $1,955 per 40ft, a spread of just $200.

Similarly, the average short-term rate on Xeneta’s XSI’s Far East-North Europe stood at $1,964 per 40ft, while the reading for its Far East-Mediterranean route was $2,326 per 40ft.

One explanation for the SCFI’s divergence is that it is compiled using rate quotes for the forthcoming week, and may well be accounting for a series of new FAK rates carriers are set to introduce tomorrow (1 November).

For example, MSC’s published new FAK rate for the Far East to North Europe trade tomorrow will be $2,700 per 40ft – bang in line with today’s SCFI spot rate.

With annual contract negotiations on the Asia-Europe trades now in its early stages, spot rates are likely to be a crucial benchmark for shippers’ 2026 long-term rates, said Xeneta chief analyst Peter Sand.

“Another uptick in spot rates from Far East to North Europe is expected on 1 November, bringing it on par with the average long term rate on this trade.

“We also saw spikes on this trade on 1 November 2024 and 1 November 2023, following periods of decline. It could be a coincidence that we are seeing that again in 2025, but it is more likely carriers are using smart capacity management and pushing hard to keep rates up at a critical time of year ahead of tenders for new contracts, he added.

However, despite rates remaining resilient for much of October, Xeneta also noted that the Asia-North Europe rate today was some 61% below its level at the beginning of 2024 – the largest decline on any of the main east-west trades – while a shipper source told The Loadstar “the carriers definitely weren’t bullish when I was in Asia recently”.

Mr Sand added: “Shippers must stay on top of these market developments day-in, day-out, because the recent uptick in short-term rates does not necessarily mean long-term rates entering validity in 2026 must also rise.”

A straw poll of The Loadstar sources suggested annual pricing next year, on Asia-North Europe at least, is expected to be slightly softer than this year, at around $1,400-$1,500 per 40ft.

It was broadly similar on transpacific trades, the WCI’s Shanghai-Los Angeles leg up 6% week on week, to $2,438 per 40ft, and Shanghai-New York up 4% week on week, to $3,568 per 40ft.

“Drewry expects a slight rate increase next week, driven by the implementation of GRIs on 1 November. However, this momentum is likely to be short-lived, with rates expected to decline soon after,” Drewry noted.

Several carriers are set to introduce GRIs tomorrow, ranging from $1,000-$3,000 per 40ft.

The big question, of course, is what effect this week’s tariff truce, which emerged from presidents Trump and Xi meeting in South Korea, will have on transpacific demand.

“Average spot rates have increased in October and are expected to increase again on 1 November, but this goes against the underlying fundamentals of subdued demand into the US,” Mr Sand said.

“The 12-month trade truce between the US and China announced this week could prompt some shippers into action, but it is unlikely to spark a surge in imports. Many shippers did their work earlier in the year, front-loading goods, and now inventories are high they will be in no rush to take advantage of lower tariffs.”

He added: “Market sentiment is a powerful force, so while the US-China truce may not spark a rush of cargo and further uptick in rates, it could apply some upward pressure to stop rates falling quite so hard in the remainder of 2025.”

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