Shipping industry news: Analysts report a widening divergence in spot freight rates between the East-West trade lanes, with U.S. route spot rates experiencing another double-digit decline.
Specifically, the Shanghai Containerized Freight Index (SCFI) as of July 4 stood at 1,763.49 points, down 5.3% from the previous period.
*Image source: Ship chaser Zhang Han*
On the Europe route, shipping demand remained generally stable, with a slight increase in market rates. On July 4, the spot rate (including ocean freight and surcharges) from Shanghai to European base ports was $2,101 per TEU, up 3.5% from the previous period. Meanwhile, the rate from Shanghai to Mediterranean base ports was $2,869 per TEU, down 3.9%.
For the North America route, shipping demand lacked further growth momentum, leading to an unfavorable supply-demand balance and continued declines in spot booking rates. The Shanghai-U.S. West Coast rate fell 19.0% to $2,089 per FEU, while the Shanghai-U.S. East Coast rate dropped 12.6% week-on-week to $4,124 per FEU.
At the same time, as of July 4, the Drewry World Container Index (WCI) declined 5.7% to approximately $2,812 per FEU, primarily due to weak demand on U.S. routes. Drewry noted that this suggests the earlier U.S. import surge—triggered by the suspension of tariff hikes—failed to produce the sustained impact initially anticipated.
Among China-originating routes, the Shanghai-Rotterdam rate bucked the trend, rising 8% to $3,468 per FEU, while Shanghai-Genoa fell 9% to $3,751 per FEU. Meanwhile, the Shanghai-New York rate dropped 11% week-on-week to $5,070 per FEU but remained 39% higher than eight weeks ago (May 8). The Shanghai-Los Angeles rate plunged 15% to $3,180 per FEU, though it still recorded a cumulative 17% increase over the past eight weeks.
Drewry expects the supply-demand balance to weaken again in the second half of the year, leading to a renewed “normalization” of spot rates. The timing depends on the direction of Trump-era tariff policies and potential capacity adjustments triggered by the U.S. Section 301 investigation, though these factors remain uncertain.
*Image source: Ship chaser Zhang Han*
**Shanghai-Rotterdam Rates Once Again Exceed Shanghai-Los Angeles Rates**
Notably, as the divergence in spot rates between the East-West trade lanes widens, WCI data shows that the Shanghai-Rotterdam rate has once again surpassed the Shanghai-Los Angeles rate. The last time this occurred was on December 5, 2024, when the Shanghai-Rotterdam rate was $4,755 per FEU compared to $3,719 per FEU for Shanghai-Los Angeles.
Jérôme de Ricqlès, an analyst at French supply chain firm Upply, stated that this indicates some success in carriers’ FAK (freight all kinds) rate hikes, while also benefiting from strict capacity management.
He noted, “Asia-Europe rates have risen over the past few weeks. Why? First, because many sailings have been canceled.”
“Second, due to the redeployment of some capacity from the trans-Pacific route, the supply-demand ratio on the Asia-Europe route has become very favorable for carriers.”
He explained, “We’re not talking about extreme numbers—it’s more about stability. But there’s market consensus on the Asia-Europe route, which is starkly different from the trans-Pacific route, where rates are now plummeting. The volume of pre-shipments between Asia and the U.S. hasn’t been as large as expected.”
If the Asia-Mediterranean route serves as a reference, Asia-North Europe rates may also decline next week.
Peter Sand, chief analyst at Xeneta, stated that the narrowing rate gap between Asia-North Europe spot rates and historically higher Asia-Mediterranean rates is a “direct result of differing capacity deployment strategies on the two routes.”
“In the first half of 2025, demand on the Asia-Mediterranean route was higher than on the Far East-North Europe route. Carriers have been betting this trend would continue, so since May, they’ve withdrawn some capacity from Asia-North Europe while continuing to add capacity to Asia-Mediterranean.”
He pointed out, “At some point, the market always reaches an inflection point.”
He concluded, “Overall, after a busy first half, demand on both routes is expected to soften in the second half of the year.”
