Container prices continue to fall globally, according to the latest figures from the Drewry World Container Index, which measures average freight rates for container shipments on several major global shipping routes. This week, the index fell 7% to $3,691 per 40-foot container. Although this is still higher than the average pre-pandemic rate of $1,420 in 2019, it does represent a significant drop from the peak of $10,377 in September 2021.
Decline in freight rates on various routes
The impact of falling tariffs is evident on key trade routes. Freight rates on the Shanghai to Genoa route declined 15%, down from $716 to $4,212 per container. Rates from Shanghai to Rotterdam also fell 11% ($525) to $4,157 per container. Furthermore, rates for shipments from Shanghai to New York dropped 5% ($336) to $6,028, while rates from Shanghai to Los Angeles were 2% ($90) lower at $5,490 per container.
However, not all routes showed declines. Rates on routes between New York and Rotterdam rose slightly by 1% to $722 and $2,067 per 40-foot container, respectively. Meanwhile, rates from Rotterdam to Shanghai and from Los Angeles to Shanghai remain stable.
Expectations for the coming months
Drewry expects prices on the Asia-Europe routes to fall further in the coming period due to declining demand. In contrast, a slight increase is expected for the Trans-Atlantic and Trans-Pacific routes. This is mainly due to potential disruptions such as labour unrest and the impact of the Chinese Golden Week holiday, which traditionally causes a temporary production freeze in China.
Background and impact
Although the current average price of $4,113 per container is still significantly higher than the 10-year average of $2,825, rates have been on a downward spiral in recent months. Cooling demand for transport and increased supply of container ships are putting sustained pressure on rates. This may eventually lead to lower transport costs for companies, but at the same time presents challenges for shipping lines trying to maintain their margins.
Source: Drewry