The nosediving of spot rates continues, as Drewry's World Container Index revised its own record of the largest weekly fall in recent times.
A 10.25% slump saw the World Container Index at US$4,014, just a tad above the psychological mark of US$4,000. The Index is at Dec-2020 levels, in line with its counterpart Shanghai Container Freight Index (SCFI).
The drop this week was punctuated by the Middle East bound trade Lane, Shanghai-Genoa prices being hit by 19% while those to Rotterdam & Los Angeles took a 10-13% hit. The Transatlantic West Bound route is the only green shoot, wherein prices piqued by 4% mostly over the congestion issues.
While the index has dipped 61% annually, it has retraced approximately 72% of its upward movement to the top from the point, the pandemic hit. The next support statistically is 15% lower at around US$3,400. Drewry is still predicting a negative outlook for the coming weeks. The Chinese manufacturers would shut shop next week owing to the "National Day Golden Week", and this is likely to have stirred rates down further for the next week.
While contract rates are reportedly stable, there would be a lot of interesting discussions, happening by the tables for renewing/ signing contracts for 2023 and 2024.
Spot freight rates by major route - Drewry's assessment across eight major East-West trades:
Author: 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.