Rising Cargo Rates

World Container Shipping Rates Keep Rising

Inflation may be easing across the developed world, but there’s one glaring exception: the soaring costs of cargo shipping on the high seas.

Spot rates for full-size shipping containers to the U.S. and Europe from Asia have risen again, according to the latest Drewry World Container Index released on June 13. The rates for three key routes have all topped $6,000 for a 40-foot equivalent unit (FEU), tripling since the end of 2023, although the pace of increases is beginning to slow.

Nearly six months of regular attacks on vessels in the Red Sea have severely stretched capacity in the container shipping industry, which is responsible for moving about 80% of all international goods trade. These disruptions have created bottlenecks at some of Asia’s largest ports.

Singapore’s maritime gateway, one of the world’s most critical crossroads for seaborne freight, is experiencing prolonged congestion. The waiting time for berth space is nearing five days, according to industry estimates, while it ranges from one to four days at the Chinese ports of Ningbo, Shanghai, and Qingdao.

In addition to the stretched supply, demand for goods remains robust, particularly in the U.S. Imports at the Port of Los Angeles, the busiest seaport in the U.S., remained above pre-pandemic peaks for the first five months of 2024, despite a slight decline in May.

According to Drewry, the cost of shipping a 40-foot container from Shanghai to Los Angeles rose 0.8% last week to $6,025, marking the sixth consecutive week of gains. The rate for Shanghai to Rotterdam increased by 2.4% to $6,177, the highest level since September 2022.

The rate from Shanghai to Genoa, Italy, in the Mediterranean Sea — one of the routes most affected by the shipping industry’s avoidance of the Red Sea — rose by 3% to $6,862, also the highest since September 2022.

Drewry predicts that freight rates from China will continue to rise next week due to ongoing congestion issues at Asian ports.

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