As Japan International Freight Forwarders Association (JIFFA) reported, container activity showed a strong pickup in May. The Global Container Port Throughput Index rose 5.4%. But freight rates continue to slide.
The World Container Index (WCI) dropped 3.3% last week, settling at US$2,517 per FEU. That marks the sixth straight weekly decline. Year-on-year, the index has fallen a steep 57%.
Earlier this year, rates spiked following the U.S. announcement of higher tariffs on Chinese imports in April. The market didn’t react immediately. Spot rates only began rising in May, peaking in early June. But since mid-June, the trend has reversed sharply.
This week, Trans-Pacific spot rates dropped again. Rates from Shanghai to Los Angeles fell 5% to US$2,675 per FEU. Shanghai to New York dropped 7%, landing at US$4,210 per FEU.
With the temporary pause on higher U.S. tariffs ending in mid-August, shipping lines are now cutting back. Many are cancelling sailings as the rush to move cargo ahead of the deadline has passed.
Analysts at Drewry expect spot rates to keep falling next week as demand continues to ease.
