Overall
This week, the Drewry composite index experienced a 1% increase, yet it has registered a 55% increase compared to the same period last year. The World Container Index (WCI) is now 92% higher than the average rates before the pandemic in 2019. 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 fell by 1% and rates from Shanghai to New York remained stable. Drewery expects rates from China to remain stable in the upcoming week.
Ocean Freight Insights
Ocean freight capacity from northwest India to the U.S East Coast remains widely available, whereas slight space issues are being experienced from south and eastern India, primarily due to feeder vessel constraints. However, space becomes available once goods are transshipped in Colombo or Singapore. In contrast, capacity to the U.S West Coast is considerably tighter due to the sharing of vessel space with other West-bound trades from Southeast Asia and Mainland China. Following disruptions related to the Red Sea, equipment availability in the Indian Subcontinent has normalized, though the region is known for occasional equipment shortages based on the carrier and depot. Best practices suggest maintaining flexibility and using an open carrier approach.
In the Far East Westbound (FEWB) trade lane, ongoing instability in the Red Sea has led to vessels rerouting via the Cape of Good Hope, significantly impacting on-time performance and schedule reliability. The recent Labor Holiday in Greater China, coupled with blank sailing programs, has led to a rapid increase in demand as shippers seek to avoid impending General Rate Increases (GRI), causing overbookings and likely rollovers in the first half of May. Equipment shortages are being reported more frequently due to these blank sailings, affecting carriers like CMA, Evergreen, Hapag Lloyd, and Yangming. It is highly recommended to pick up containers immediately after availability to avoid delays. Further, carriers are planning another round of GRIs in the second half of May, amounting to an additional $1000 per 40-foot container.
For Full Container Load (FCL) U.S. exports, capacity is readily available for base-port to base-port moves to Asia, North Europe, and Mediterranean ports. However, some inland rail locations are experiencing spotty equipment availability related to global disruptions in container flows. Shippers are encouraged to place bookings 3-4 weeks in advance of the cargo ready date to ensure availability.
Global Air Cargo Update
During the third week of April, there was a noticeable return to growth in global air cargo tonnages. This increase was primarily driven by a surge in flower shipments from Central and South America (CSA) in anticipation of Mother’s Day, which significantly offset reduced demand from the Middle East and South Asia (MESA) during the Eid celebrations. The substantial increase in flower shipments to North America for Mother’s Day played a key role in boosting the global air cargo tonnages during this period.
Regionally, the performance variances were notable. While CSA regions displayed strong week-on-week growth due to the high volume of flower shipments, other regions like MESA saw sharp declines in air cargo tonnages. This decline was influenced by seasonal effects and specific regional challenges, such as weather disruptions in Dubai that affected flight operations.
We are continuing to monitor all lanes, ports, and services to provide you with the best possible service at the best possible price.
M.E. Dey and Co. monitors the market daily to find competitive rates that pair well with exceptional transportation services. We provide fixed-rate contracts in addition to standard market rates. Contact us to talk with a representative or request a quote to get started.