Container Rates Extend Gains as Carriers Tighten Transpacific Capacity

Drewry’s World Container Index rose for a second straight week, with higher transpacific rates outweighing declines on Asia-Europe trades as carriers continue to manage capacity amid widespread supply chain disruption.

The Drewry World Container Index rose for a second consecutive week as carriers tightened transpacific capacity, while Xeneta warned that months of Middle East disruption are increasingly pushing up long-term freight contracts.

Drewry’s benchmark WCI increased 1% to $4,339 per 40-foot container, driven by higher U.S.-bound rates. Shanghai-to-New York jumped 10% to $8,706, while Shanghai-to-Los Angeles rose 6% to $6,244.

Carriers are actively restricting capacity through blank sailings, with 10 sailings cancelled in each of the past two weeks and another seven planned for next week. Drewry expects tighter capacity to keep rates less volatile in the coming week.

The picture was weaker on Asia-Europe routes. Shanghai-to-Genoa fell 8% to $5,080 per 40-foot container, while Shanghai-to-Rotterdam declined 5% to $4,425. Carriers have announced new FAK rates of $6,700 to $7,100 on Asia-Mediterranean routes from August 15, although Drewry said weakening demand raises questions over whether those levels will hold.

The broader east-west market remains disrupted by security concerns around the Suez Canal and Strait of Hormuz, Panama Canal restrictions, congestion at Asian ports following Typhoon Dolphin and record-low water levels on the Rhine.

Meanwhile, freight rate benchmarking firm Xeneta said nearly six months of Middle East disruption is increasingly spilling into the long-term contract market.

“The knock-on effect of almost half a year of disruption caused by war in the Middle East is now spreading into the long-term contract market,” said Xeneta Chief Analyst Peter Sand.

Since the end of February, Xeneta said long-term rates from the Far East to the U.S. West Coast and East Coast have risen 41% and 40%, respectively. Rates to North Europe are also up 41%, while Mediterranean contracts have increased 17%.

Those gains remain well below the increases in the spot market. Xeneta puts spot rates from the Far East to the U.S. West Coast 271% above pre-crisis levels, with U.S. East Coast rates up 287%.

The widening gap has strengthened carriers’ position in contract negotiations. On the Far East-U.S. West Coast trade, spot rates now sit $4,103 per FEU above long-term rates, according to Xeneta.

“This is the longer financial tail of supply chain shocks,” Sand said, warning shippers against locking into year-long contracts in a rising market. Instead, he recommended shorter agreements that secure capacity while allowing rates to adjust if the spot market turns.

Editorial Standards · Corrections · About gCaptain

Subscribe for Daily Maritime Insights

Sign up for gCaptain’s newsletter and never miss an update

— trusted by our 104,260 members