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Drewry’s World Container Index knocks January 2020 levels, but will the spring leave the winter far behind?

The Drewry’s World Container Index (WCI) dipped to US$1,791 on 16 March 2023, recording its 50th week of dips over the last year.

The rates have fallen on all routes further this week, with the transatlantic rates dipping to US$5,326. The rates on this route touched a high during the fourth quarter of 2022. But now they have fallen to a 20-month low, in a span of a quarter.

Rates on the Shanghai- Rotterdam route are well past the pre-pandemic rates, while other rates hover in the mid-2020 levels. The current value at which WCI trades is at a shocking 47% of the 5-year moving average of US$3,781.

But have the rates bottomed enough? Or with the context of the seasons, will spring be far behind with the winter fading away, especially for the rates?

There are some dry signs. The Container Pricing Sentiment Index captured by the Container Xchange hinted that the fall could be arrested in March, based on the survey trends observed at the end of February.

Though, this has not actually seeped into the prices yet. The declines are slow-paced still. The Chinese manufacturing data pointed out to a PMI of 51.6 in February 2023, with the industrial production output and domestic retail sales increasing by 2.4% and 3.5% respectively, suggesting that there is a slow pick-up transition. The US Inflation has cooled to 6%, its lowest since October 2022.

Signals that go against this thesis are that the rates on trade lanes over other indices (SCFI, CCFI, FBX and Xeneta) have been dipping significantly lower. The Cancelled sailings tracker from Drewry’s points out to a mere 8% cancellation across major services. This indicates a good amount of incumbent supply. And with over 80 new container vessels hitting the water in the next nine months, this factor/ add-on in capacity is going to play a key role in resisting price increases.

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





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