The containership freight market has entered an endless downward spiral, with freight rates recording losses for the tenth consecutive week. Specifically, Drewry’s World Container Index (WCI) retreated to $/FEU for the week ending Thursday, August 21, registering a decline of approximately 4% on a weekly basis.
Regarding specific routes, significant losses were observed on the Pacific routes. In particular, freight rates on the Shanghai-New York and Shanghai-Los Angeles routes decreased on a weekly basis by 5% and 3% respectively. Nevertheless, Drewry expects that the volatility of spot freight rates on these routes will be limited in the coming weeks.
At the same time, freight rates on the Asia-Europe routes also recorded a drop. Specifically, freight rates on the Shanghai-Rotterdam and Shanghai-Genoa routes decreased on a weekly basis by 6% and 3% respectively. As Drewry highlights, the increased transport capacity on these routes is exerting downward pressure on spot freight rates, despite strong demand and congestion in European ports. In fact, this trend is expected to persist in the coming weeks.
In general, Drewry expects that the supply-demand balance in the containership market will weaken again in the second half of the year, leading to a further decline in spot freight rates.
