Drewry's World Container Index Falls 3%: What's Driving the Decline?

Global container freight rates are starting to ease, with the latest Drewry World Container Index (WCI) falling 3% to $4,429 per 40ft container on October 29. The decline was mainly driven by lower rates on the transpacific, where prices from Asia to the United States continued to drop.

However, not all trade routes are following the same trend. While transpacific rates are weakening, Asia-Europe rates have remained relatively stable.

What happened?

The biggest changes were seen on routes from China to the United States:

• Shanghai-Los Angeles: Rates fell 6% to $7,514 per 40ft container.
• Shanghai-New York: Rates decreased 5% to $9,631 per 40ft container.
• Shanghai-Rotterdam: Rates edged up 1% to $3,686 per 40ft container.
• Shanghai-Genoa: Rates remained stable at $4,151 per 40ft container.

This marks a shift after two weeks of increases in the overall index.

What's driving the changes?

Two factors are putting downward pressure on transpacific rates:

• Lower US import demand: US ocean import volumes are forecast to fall 11% month over month in November, according to the National Retail Federation.
• Additional shipping capacity: Some vessels previously used on other trade routes are being redeployed to the transpacific, increasing available capacity.

Although carriers have announced cancelled sailings to help support rates, weaker demand and additional vessel capacity are making it harder to maintain higher prices.

Meanwhile, Asia-Europe rates have been more stable, with carriers continuing to announce higher November freight rates.

What this implies for freight forwarders

With rates moving in different directions across trade lanes, keeping up with market changes is important when preparing customer quotes.

A few things freight forwarders should keep in mind:

• Keep rates up to date: Falling spot rates can make previously received carrier quotes less competitive.
• Watch rate validity: Shorter quote validity periods can help account for market changes, especially on the transpacific.
• Compare carriers: Rates may vary between carriers, making it important to check multiple options before quoting customers.

As the market continues to shift, having a clear picture of current freight rates can help forwarders make better quoting decisions.

Starboard's Freight Index provides daily rate benchmarks across thousands of trade lanes, helping forwarders see where rates stand.

Explore the Starboard Freight Index to see the latest market rates.