How is current demand affecting freight rates, and in turn, ocean carrier revenues?

Spot rates have plunged from stratospheric highs seen during the COVID-era boom, but that was a one-off event. The broader question is how current spot rates relate to those in normal trading conditions prior to the pandemic.

Different index providers have different data sources and use different methodologies. As a result, they give different rate assessments, although they generally trend in the same direction.

The Drewry World Container Index (WCI) shows Asia-U.S. spot rates roughly on par with pre-COVID levels after being above them in May and June. The WCI put average spot rates for Shanghai to Los Angeles at $1,638 per forty-foot equivalent unit in the week ending Thursday, in line with rates during the same week in 2019 and up 7% from 2018.

The WCI shows the same pattern on the Shanghai-New York lane: higher-than-normal spot rates in May and June followed by a convergence with pre-COVID levels this month. The WCI Shanghai-New York assessment for the week ending Thursday was $2,590 per FEU, in line with 2018 and 4% below 2019 levels.

As written by Greg Miller – Freightwaves.com