The Drewry World Container Index (WCI) has lost about 600 points since the New Year 2023, despite a neutral outlook on rates at the start of the year, as a weekly dip of 3.5% this week, saw the index plummet to US$1,535.75, a figure last seen by the composite index in early April 2020.
The highlights for the week were that the transatlantic head-haul and back-haul rates crept into the greenish territory, recording gains of 1% and 2% respectively despite a fall in the overall index. The Rotterdam-New York rates are now lingering at US$3,226. The fall in the overall index was triggered by the correcting transpacific rates. The Shanghai-Los Angeles rates fell to US$1,642 while the Shanghai-New York rates fell to US$2,543, a three-year low. The rates from Shanghai to Rotterdam (Europe) and Genoa (Mediterranean) too saw the corrective action extend, albeit at a lesser pace.
The WCI is merely 10% above the last five-year pre-pandemic average of US$1,387 and is about 115 points higher than the average rates of 2019. With the strike fear dispelled to a great extent and the container freight sector relying on minor bulk cargo as well to make up for the rate fall- there aren’t clear signals, as yet, on when the knockdown effect, of the rate falls across the ocean freight sector, would be stalled.
With yet another week to go, this has been the index’s worst monthly performance in 2023, thus far which ironically coincides with the peak consumption season too. Drewry, nevertheless, has maintained the commentary of expected rate increases for the East-West trade on most routes as of 22 June 2023.
Spot freight rates by major route - Drewry's assessment across eight major East-West trades:
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
