The Drewry World Container Index took its largest ever weekly dive of 5.3% to end at US$1,592, its lowest in 36 months, as transpacific rates returned to lead the weekly dip.
Despite the signaling looms of congestion in the US West Coast owing to port union strikes, with ports in the west coast reporting congestion of five days (Los Angeles and Long Beach) to nine days (Seattle), the rates cooled off significantly across both China – US and China- Europe.
At US$1,349, the Shanghai- Rotterdam numbers are at their lowest since October 2019. The China – US trade lanes both witnessed an 8% dip with both trade lanes reporting their worst figures since Mid-Jun 2020, that is three years. The Europe-US Transatlantic trade witnessed yet another 5% cool off, while all backhaul trades witnessed a much subdued price action.
It must be noted that the Chinese Manufacturing PMI recovery has not been smooth yet. China’s exports to the US reported a fall of 18% from a year ago in US dollar terms in May 2023. China’s overall exports too slid to US$283.5 billion, a 7.5% year-on-year contraction which was a reversal from the 8.5% growth reported in April 2023. Imports too reported a fall to US$217.7 billion.
With the general rate increases by carriers termed as ineffective and with declining inventory levels in the US, the nearing end of the second quarter of 2023 showcases an uncertain short term, as far as rate action is concerned, despite the Drewry commentary of expected price rises in trade lanes other than the transatlantic.
Author of the article: Gautham Krishnan
Gautham Krishnan is a logistics professional with Fluor Corporation, in the area of project logistics and analytics, and has worked in the areas of Project Management, Business Development and Government Consulting
