Container Shipping Industry Archives

Container shipping rates continue to fall as demand weakens following a period of frontloading by shippers ahead of potential tariff hikes, according to a report. Average rates on the Far East to U.S. West Coast trade dropped to just over $2,000 per forty-foot equivalent unit (FEU) for the week ending August 13, the lowest level since late 2023, according to Xeneta.

Far East to U.S. East Coast rates fell to $3,174 per FEU, down from $3,311 the previous week, while North Europe to U.S. East Coast rates declined to $1,941 per FEU from $2,015. Data from the IndexBox platform shows that Far East to U.S. East Coast rates have decreased by 12.8% since late July, with South America experiencing an even sharper drop of 18.3%.

Xeneta noted that carrier capacity management and reduced tariff uncertainty helped slow the overall rate decline to 6% in July, following a steep 53% drop in June. The Trump administration recently extended the pause on higher tariffs for Chinese imports by another 90 days, eliminating the urgency for shippers to accelerate shipments. “Shippers have already frontloaded goods during the initial tariff window, so spot rates are expected to decline further,” said Xeneta Chief Analyst Peter Sand.

Rates on Far East to North Europe routes fell to $3,247 per FEU, while Far East to Mediterranean rates slid to $3,337. Increased vessel capacity in these and other trade lanes is expected to push rates even lower in the coming weeks unless demand rebounds.

Source: IndexBox Market Intelligence Platform

The container shipping industry is experiencing unprecedented changes as record-breaking capacity and unexpected rate increases signal potential disruptions in the near future. According to analyst Xeneta, capacity from the Far East to North Europe is projected to reach an all-time high in mid-April, surpassing the previous record set in November 2021 during the pandemic, which was 336,800 twenty-foot equivalent units. Simultaneously, average spot rates on this route have risen by 4.8%, reaching $2,457 per forty-foot equivalent unit.

The Mediterranean route has also seen a significant increase, with rates jumping 6.8% to $3,270 per FEU. This unusual combination of increased capacity and rising rates during a typically slack period has sparked speculation about tariff impacts on trade flows. Xeneta’s chief analyst, Peter Sand, suggests that shippers may be redirecting goods from the Far East to Europe, avoiding the United States, where tariffs on some Chinese imports have reached 245%.

While the Far East to Europe routes are experiencing rate increases, other major trade lanes are showing different trends. Year to date, all fronthaul trades have seen significant rate decreases, ranging from 20% for North Europe to U.S. East Coast to 50% for Far East to U.S. West Coast. This comes as carriers announce general rate increases and surcharges to stabilize prices.

Adding complexity to the market dynamics is port congestion in North Europe, affecting ports such as Antwerp, Le Havre, London Gateway, and Hamburg due to factors like weather, crane maintenance, and labor unrest. Sand warns of potential “carnage” when the record capacity from the Far East arrives in North Europe, given the average transit time of 55 days. “As we saw in 2021, congestion is toxic for ocean container shipping and can quickly spread across global supply chains,” Sand noted.

Source: IndexBox Market Intelligence Platform

Container Shipping Rates Decline as Demand Slows Post-Frontloading Surge

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