Seatrade-Maritime: Container freight rates continue march northwards

Published by Seatrade-Maritime

Container lines’ turnaround in fortunes continues as Red Sea diversions lengthen lead times and retailers prepare for major sales events.

The Shanghai Containerized Freight Index (SCFI) enjoyed another strong week up 9.5% on Friday at 2,985.22 points. This follows a 6% increase for the week ended 5 June, and a 16% jump on the week ended 29 May.

Drewry’s World Container Index (WCI) also continued to move northbound with a 3% rise to $3,549 per feu on 11 June, having jumped a massive 23% for the seven-day period ended 4 June.

While as if often the case SCFI and WCI grow somewhat out of step with each on a week-by-week basis both show a strong overall upward trend.

Freight rate growth on the Asia – Europe reported Drewry was higher than the overall WCI with Shanghai – Rotterdam up 5% at $3,768 per feu. Growth on Transpacific matched overall WCI with Shanghai to Los Angeles increasing 3% to $4,683 per feu.

In terms of demand on Transpacific Drewry noted: “Demand is supported by shippers bringing forward bookings ahead of potential US tariff changes expected in July and additional cargo demand linked to the 2026 FIFA World Cup.”

On a wider level across the East – West trades the peak season is seen as arriving early this year with diversions via the Cape of Good Hope by major lines remaining a factor. “Continued Red Sea diversions are extending transit times and encouraging importers to place orders earlier to ensure cargo arrives ahead of the traditional peak season,” Drewry said.

Retail trends are another factor and the analyst noted, “Retailers are also replenishing inventories earlier than normal in preparation for major sales events, including Amazon Prime Day and TikTok’s mid-year promotions in June and July.”

Geopolitical tensions in the Middle East and closure if the Strait of Hormuz to the majority of traffic is increasing fuel costs and bunker surcharges which in turn push up freight rates.