Container spot rates fall as carriers engage in price war for cargo

Container spot freight rates on major east-west trade lanes declined again this week as subdued demand and intense competition among carriers drive pricing downward. The Drewry World Container Index (WCI) recorded a 10% weekly drop, bringing global average rates to the lowest since April last year. While it’s too early to predict a peak-season rebound, current demand remains weak.

The most significant rate drops occurred on transpacific routes. The Shanghai–Los Angeles leg fell by 11%, while Shanghai–New York saw a 13% decline. Industry sources suggest this is due to sluggish post-Chinese New Year factory output, leading carriers to cut rates to attract cargo.

Asia-Europe rates also fell: Shanghai–Rotterdam dropped 9%, and Shanghai–Genoa declined 8%. Meanwhile, the Rotterdam–New York headhaul route saw a 3% dip.

Shipping lines plan to implement general rate increases (GRIs) from 1 March to counter prolonged rate declines. Hapag-Lloyd announced new Freight for Asia–North Europe and Mediterranean shipments. However, analysts at Drewry caution that rate hikes will likely fail unless accompanied by capacity reductions. March’s increased shipping capacity could further weaken rates, reducing the success of planned GRIs. As alliances reshuffle vessel-sharing agreements, capacity on Asia–North Europe routes could shrink by up to 11% year-on-year, potentially influencing future rate trends.