According to The Loadstar, the ongoing Golden Week holiday in China has led to a pause in the Shanghai Containerised Freight Index (SCFI) this week. However, Drewry’s World Container Index (WCI) indicates a continued downward trend in spot rates across major east-west shipping routes.
This week saw the WCI report a 7% drop for the Shanghai-Rotterdam route, bringing it down to $1,613 per 40ft container. Meanwhile, the Shanghai-Genoa route experienced an even steeper decline of 9%, ending at $1,804 per 40ft. These figures represent significant reductions of 58% and 53%, respectively, compared to last year’s rates.
The current market conditions have prompted carriers like Hapag-Lloyd and MSC to announce new freight all kinds (FAK) rates set for implementation on October 15. Hapag-Lloyd plans to introduce FAK rates of $1,200 for a 20ft container and $2,000 for a 40ft on routes from Far East to North Europe. For Far East-Mediterranean routes, these rates will vary between $2,150 and $2,700 based on destination specifics. Similarly, MSC has proposed FAK levels of $1,320 per 20ft and $2,200 per 40ft for Asia-North Europe routes.
Freight forwarders are reporting that other carriers may follow suit with similar rate increases soon; however, some discounts are already being offered as well. “Most carriers seem to be targeting around the $2,000 mark for a standard container by mid-October,” one buyer shared with The Loadstar. “While we’ve seen some slight reductions from initial offers already this month—despite it still being early October—I anticipate further adjustments.”
The transpacific trade is also feeling pressure; WCI data shows that spot rates from Shanghai to Los Angeles fell by about 5% this week to reach $2,196 per container while those heading towards New York dropped by approximately 3%, settling at around $3,200 per unit—a stark contrast after what analysts at Xeneta described as an unpredictable September.
Xeneta’s chief analyst Peter Sand noted that average spot prices on transpacific routes have dipped below late August levels following an unexpected spike earlier in September: “This fluctuation serves as a reminder of market volatility,” he stated while predicting continued declines through late next year but warned against complacency due to potential geopolitical tensions affecting trade dynamics.
Even traditionally stable transatlantic shipping lanes are facing challenges; recent WCI reports indicate that Rotterdam-New York leg lost another percentage point this week down to approximately $1,796 per unit—marking its lowest since early last year—and reflecting broader trends where westbound spot prices have decreased over ten percent since August’s end.
In light of these developments and unsustainable market conditions affecting profitability margins significantly enough for operational decisions like service cancellations or modifications—Hapag-Lloyd announced plans today regarding discontinuation of its Caribbean Express service starting next year which includes select US east coast stops such as Philadelphia and Port Everglades.
