Overall
The Drewry WCI composite index is 45% below the previous pandemic peak, but it is 304% more than the average 2019 (pre-pandemic) rate. Additionally, the average index for the year-to-date significantly exceeds the 10-year average, highlighting the lasting impact of the exceptional conditions during the 2020-2022 period.
Freight rates between various ports have shown diversity; rates from Rotterdam to New York remained stable. Rates from Shanghai to Los Angeles decreased 3% and Shanghai to New York declined by 1%. Drewry believes that spot rates have peaked, but continued shipping disruptions will keep a floor under the spot rates for some time.
Ocean – TPEB: Volumes on Transpacific routes remain strong, exceeding last year’s numbers. Structurally blank sailings are occurring due to Cape of Good Hope (COGH) routings and port congestion in Asia and North America. Expect further delays and capacity challenges en route to the U.S. East Coast (EC) due to bad weather conditions around the COGH. Extra loader (XL) space injected into the Transpacific trade lane has reduced space pressure on the U.S. West Coast (WC), specifically the Pacific Southwest (PSW) from China’s main ports. Shipping lines have started to reduce rates for both the EC and WC to match supply and demand, and have introduced an early General Rate Increase (GRI) announcement to stabilize rates for the second half of August. Peak Season Surcharge (PSS) discussions are very intense at the moment, as the gap between FAK rates and NAC rates do not support mitigations, especially in light of a potential GRI in August.
Ocean – FEWB: Port congestion in Asia is improving, but overall on-time performance for Asia-Europe trade remains suboptimal due to reroutings via the Cape of Good Hope. Blank sailings will continue in August. A few extra loaders have been injected into the FEWB to compensate for downsized vessels and maintain schedule reliability. Demand is strong, and floating rates remain high. The Shanghai Containerized Freight Index (SCFI) dropped slightly over the past two weeks. With blank sailings in place, the floating market is expected to remain critical. Long-term named account space remains limited and restricted by carriers for space and equipment priority. Equipment shortages have improved since May and June, but potential shortages for certain container types, such as 20’GPs, are still expected for some Port of Loadings (POLs) with less direct calling. Port congestion in the Netherlands/Belgium, coupled with intermittent strikes in Germany and France, has impacted terminal operations and last-mile deliveries. For urgent cargo with a target delivery date, selecting premium options as early as possible is recommended for an earlier estimated time of departure (ETD) and higher equipment priority.
Ocean – TAWB: In North Europe, carriers have begun noticing the effects of reduced capacity due to full vessels. Demand remains stable, with some factories in the Northwest of the continent closed for July and August. Congestion in the Mediterranean region persists, with an average wait time of 4-7 days outside of main ports in Italy and Spain. Strikes at ports in Southern Italy have exerted more pressure on certain services, affecting the East Mediterranean, where rates are increasing. Yang Ming Line announced a GRI for September 1st, while Mediterranean Shipping Company and Ocean Network Express are considering a PSS in September to stop rate deterioration. Carriers already increased rates for August in the Mediterranean, with no news about new increases in September. Signs of the usual slack season are expected in August, starting next week.
Ocean – U.S. Exports: Capacity from the Southeastern U.S. has tightened on routes to the Indian subcontinent, Middle Eastern ports, and North European ports, amid vessel omissions and blank sailings. Service strings relying on feeder services to final Port of Discharge (POD) are losing capacity as vessels are shifted to headhaul trades, deteriorating the repeat serviceability of feeder lanes. Challenges related to earliest return dates (ERDs) continue for U.S. exporters. Booking two weeks in advance for bookings loading at a coastal port and 3-4+ weeks in advance for bookings loading at an inland rail point is recommended to ensure the smoothest loading experience.