Container Spot Rates Return to Pre-COVID Levels: A New Normal

Container spot rates have finally returned to pre-COVID levels, marking a new normal in the industry. This shift is a significant development, considering the rates had plummeted by 90% during the pandemic.

The rebound is largely attributed to a surge in demand and a shortage of containers. In the article, we saw how the pandemic led to a sharp decline in global trade, causing a surplus of containers that were left idle. Now, with the economy recovering, containers are in high demand, and rates are rising accordingly.

As a result, shippers are facing higher costs, which is a challenge for many businesses. However, the increase in rates also means that carriers are earning more revenue, which could lead to better services and more efficient operations.

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Freight rates have been on the rise, with the global container freight index reaching $5,023 this week, an 11% increase from the previous week.

This upward trend is evident in specific routes, such as the China/East Asia to North America West Coast line, which has seen a 12% increase to $7,930.

Drewry's World Container Index (WCI) has also reported a significant increase, with the composite index rising 10% to $5,868 per 40ft container this week.

Rates from Shanghai to New York have surged by 17% to $9,158 per 40ft container, while rates from Shanghai to Los Angeles increased by 12% to $7,472 per 40ft container.

In comparison, the China/East Asia to North America East Coast route has seen an 8% increase to $8,897, and rates from Shanghai to Rotterdam have gone up by 10% to $8,056 per 40ft container.

The FreightOS Baltic Index (FBX) has also seen significant changes, with the global container freight index reaching $5,023 this week, marking an 11% increase compared to the previous week.

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The West Coast rates are back to pre-pandemic norms, with China-West Coast rates assessed at $1,378 per forty-foot equivalent unit on Monday, down 93% from their all-time high in September 2021.

The East Coast is closing in on the West Coast rates, with Shanghai-Los Angeles spot rates at $1,992 per FEU, down 84% from their peak in November 2021, but still $557 per FEU above where they were in late December 2019.

Container shipping spot rates are also relatively unchanged on the West Coast, with North Asia-West Coast spot rates at $1,300 per FEU, $50 per FEU below their assessment at this time in 2019.

Asia-West Coast rates have finally returned to normal after a wild ride.

The Freightos Baltic Daily Index (FBX) has been relatively unchanged since November 23, and is down 93% from its all-time high in September 2021.

Rates have now completed a full round trip since the COVID-induced consumer boom began, and are back to where they were at this time of year in 2019.

The weekly Drewry World Container Index (WCI) has also been roughly flat since December 8, and is down 84% from its peak in November 2021.

Despite still being $557 per FEU above where it was in late December 2019, the Shanghai-Los Angeles spot rate has made significant progress.

Platts, a division of S&P Global Commodities, put North Asia-West Coast spot rates at $1,300 per FEU as of Monday, $50 per FEU below its assessment at this time in 2019.

The U.S. West Coast market "may have reached bottom", said Platts.

Asia-East Coast shipping rates are heading back to pre-COVID levels. This is a significant development, especially considering the high demand that kept East Coast rates higher than West Coast rates throughout 2022.

The Drewry World Container Index (WCI) assessed Shanghai-New York spot rates at $3,889 on Thursday, down 76% from the all-time high in September 2021. This decline is a clear indication that the market is normalizing.

Congestion at East Coast ports, particularly in Savannah, Georgia, has been a major contributor to the sustained demand. However, with 10 ships in the queue on Monday, down from almost 50 at one point this summer, congestion is finally clearing.

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The Freightos Baltic Daily Index (FBX) put China-East Coast spot rates at $2,905 per FEU on Monday, down 87% from the peak in September 2021. This rate is still up $295 per FEU or 11% from pre-COVID levels, but it's a significant drop nonetheless.

The normalization of East Coast-West Coast price spread is also worth noting. The premium for East Coast rates over West Coast rates has dropped from as high as $6,000 per FEU to $1,527 per FEU by the last week of December. This is near its traditional level and a welcome return to normalcy.

The Shanghai-to-Los Angeles spot rate dropped for the second week, down 4.9% to $6,934.

Spot rates for Asia-U.S. West Coast services fell 4% to $7,738, showing a decline in container rates on this route.

The Shanghai-to-Rotterdam spot rate was stable at $8,260, indicating a lack of change in this particular route.

Rates to northern Europe from Asia dropped 2% to $8,420, another decline in container rates on this route.

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Judah Levine, head of research at Freightos, suggests that supply and demand in the shipping market are nearing a balance not seen in recent months.

Daily quoted spot rates are declining, and carriers are offering rate reductions, which is a shift from the recent peak season surcharges and general rate increases.

The series of peak season surcharges and general rate increases by freight shipping lines from Asia to the U.S. and Europe appears to have paused, at least through August.

Ocean freight costs have been on the rise. Drewry's World Container Index decreased 3% to $3,855 per 40ft container this week.

Freight rates are continuing to climb, with the FreightOS Baltic Index (FBX) reaching $5,023, an 11% increase from the previous week. This marks a significant surge in global container freight costs.

The China/East Asia to North America West Coast line has seen a 12% increase to $7,930, while the China/East Asia to North America East Coast route rose 8% to $8,897. These specific routes are experiencing even more pronounced changes.

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Drewry's World Container Index (WCI) has also reported a significant increase, with the composite index rising 10% to $5,868 per 40ft container. This represents a 298% surge compared to the same week last year.

Rates from Shanghai to New York have increased by 17% to $9,158 per 40ft container, while rates from Shanghai to Los Angeles have gone up by 12% to $7,472 per 40ft container. Rates from Shanghai to Rotterdam have also risen by 10% to $8,056 per 40ft container.

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The World Container Index is a valuable tool for understanding the global container shipping market. It's established through a weekly process that takes into account various tradelane indices and a main composite index.

To get a deeper understanding of the index, it's worth exploring the correlations between tradelane indices and the main composite index. This can help you identify patterns and trends in the market.

The index is designed to provide a comprehensive view of the global container shipping market, making it a useful resource for anyone involved in the industry. The World Container Index is a valuable tool for understanding the global container shipping market.

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By examining the correlations between tradelane indices and the main composite index, you can gain insights into the relationships between different regions and trade routes. This can help you make more informed decisions about your business.

The methodology behind the World Container Index is based on a robust process that takes into account various factors, including tradelane indices and the main composite index.

We have access to an exclusive ocean freight cost benchmarking club that compares costs on over 14 million teu of freight. This is a valuable resource for anyone looking to stay on top of container spot market trends.

The club provides a unique perspective on the container spot market, allowing us to make informed decisions about our shipping needs. It's the first place I go to get a sense of the current market conditions.

Our weekly operational metrics are a key part of this process, giving us a clear picture of what's happening in the market. We can track changes in container spot market freight rates in real-time.

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The ability to benchmark costs on such a large scale is a game-changer for anyone in the shipping industry. It's an incredible resource that I've found to be invaluable in my own work.

By staying on top of these metrics, we can make more informed decisions about our shipping operations. This is especially important in a rapidly changing market like the container spot market.

It's worth noting that we've been publishing benchmark container spot market freight rates since 2006. This has given us a unique perspective on the market and its trends.

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The market outlook is looking promising for container spot rates. Judah Levine, head of research at Freightos, believes that supply and demand are nearing a balance, a rare occurrence in recent months.

Daily quoted spot rates are declining, and carriers are even offering rate reductions. This is a significant shift from the peak season surcharges and general rate increases that were prevalent from Asia to the U.S. and Europe just a few months ago.

Looking ahead, the future trajectory of sea freight rates will depend on several factors. Shippers and carriers will play a crucial role in determining the outcome.

Carriers are beginning to adjust their operations to alleviate congestion, with MSC's 'Britannia' service altering its route to bypass Singapore. This change could potentially ease some congestion in the region.

Shippers can help ease the pain points in global supply chains by remaining calm and collected. This approach can help them keep as many options open as possible.

Economic and policy changes, such as new tariffs or trade agreements, will also play a significant role in shaping the future of sea freight rates. Global trade policies will be a key factor in this regard.

Potential strike actions at major ports or new tariffs under different political administrations could lead to further market disruptions. These disruptions could have a lasting impact on the long-term market.

The market outlook is looking more balanced than it has in recent months. Judah Levine, head of research at Freightos, notes that supply and demand are nearing a balance.

Supply and demand are key factors in determining shipping rates, and right now, it seems like demand might be peaking.

Carriers are adding more services to alleviate congestion, which could lead to a decrease in shipping rates.

A series of peak season surcharges and general rate increases from Asia to the U.S. and Europe appears to have paused, at least through August.

Container spot rates have been on the rise, with the global container freight index increasing by 11% to $5,023. The FreightOS Baltic Index (FBX) reported this significant jump in its latest weekly release.

The China/East Asia to North America West Coast line has seen a particularly steep increase, rising 12% to $7,930. This is a notable trend, as it suggests that demand for container shipping is high in this region.

Rates from Shanghai to New York have surged by 17% to $9,158 per 40ft container, while rates from Shanghai to Los Angeles increased by 12% to $7,472 per 40ft container.

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The East-West price spread has finally normalized, and it's a welcome relief for cargo owners.

In recent years, the spread between East Coast and West Coast import rates had reached an unusually high premium of $6,000 per FEU during the 2020-22 container shipping boom.

The exceptionally high spread persisted well into 2022, with the East Coast premium topping $4,500 per FEU as recently as early September.

However, by the last week of December, the premium had dropped to $1,527 per FEU, near its traditional level.

This normalization is a return to pre-pandemic averages, which were around $1,400-$1,500 per FEU.

The Freightos Baltic Daily Index (FBX) and Platts indexes have both reported the same normalization pattern, with the spread between East/West Coast import rates now at $1,525 per FEU.

This is a significant drop from the all-time high in September 2021, and it's a sign that the market is stabilizing.

The upturn in freight rates is a complex issue, but several key factors are contributing to it. One major factor is the continued economic recovery post-pandemic, which has led to increased demand for goods.

This increased demand has put pressure on shipping capacities, driving up freight rates. The conflict in the Red Sea region has also played a significant role, forcing shippers to reroute around the Cape of Good Hope.

As a result, routes from the Far East to the US East Coast and West Coast have seen rates surge by 268% and 366% respectively since December 2023. This is a significant increase that's having a ripple effect on the global supply chain.

Major transshipment hubs like Singapore and Port Klang in Malaysia are also experiencing high levels of congestion. This congestion is due to increased volumes and strategic decisions by carriers to reduce port calls, leading to bottlenecks.

The average TEU of each ship arriving in Singapore has risen by 18.5% from January to May, contributing to the congestion. This congestion has now reached its second-highest level ever, just 1.9% shy of the August 2021 record.

The recent surge in freight rates is also reflected in the latest weekly FreightOS Baltic Index (FBX) release, which shows a global container freight index of $5,023, marking an 11% increase compared to the previous week.

Trans-Atlantic rates are still far from normal, with the FBX Europe-East Coast assessment at $5,693 per FEU as of Monday, 2.9 times its level at this time in 2019.

The Drewry WCI Rotterdam-New York assessment was $6,989 per FEU, also 2.9 times pre-pandemic levels. This remaining bright spot for carriers is about to get snuffed out as carriers inject "serious amounts of capacity" on this trade lane.

Capacity from the Mediterranean will grow at an average of 25% over 2019 in January-February 2023, according to Sea-Intelligence CEO Alan Murphy. This capacity infusion should depress spot rates.

The continued economic recovery post-pandemic has led to increased demand for goods, exacerbating the pressure on shipping capacities and driving up freight rates.

The world of container spot rates is a complex and ever-changing landscape, and recent data is no exception. Freight rates are continuing to climb, with the global container freight index reaching $5,023 in the latest weekly FreightOS Baltic Index (FBX) release.

Specific routes are seeing even more pronounced changes, with the China/East Asia to North America West Coast line experiencing a 12% increase to $7,930. This is a significant jump, and one that's likely to impact shippers and carriers alike.

The FreightOS data also shows that the China/East Asia to North America East Coast route rose 8% to $8,897. This is another notable increase, and one that highlights the volatility of the market.

Drewry's World Container Index (WCI) has also reported a significant increase, with the composite index rising 10% to $5,868 per 40ft container. This is a substantial jump, and one that's likely to have far-reaching consequences.