China’s freight rates are increasing, and the Drewry World Container Index (WCI) expects it to grow further. The carriers are shocked as the season is usually the slowest. However, it is expecting a sudden increase in demand, leading to high freight. The expectation is that it will rise further for the routes beginning from Shanghai, China. Thus, the WCI recorded a 12% increase every week. Its fast pace increase has surprised everyone. The routes starting from Shanghai and ending at Los Angeles and New York Legs cover it.
WCI recently observed a rise in the freight rates of the routes from China. The carriers are in shock, as it is often a slow season. The routes that are experiencing a sudden rise in freight rates are:
- Shanghai-Los Angeles: $4,172 per 40 ft
- Shanghai-Rotterdam: $4,476 per 40 ft
- Shanghai – New York Legs: $5,717 per 40 ft
The rates are going high in double digits. The above-mentioned details are from the recent survey of Drewry’s World Container Index, which records a 12% week-on-week rise. Several factors can impact the prices of freight containers. The major reason is the rise in demand and tight capacity. Meanwhile, other routes, like Shanghai-Genoa, are experiencing an 11% rise.
There was an unexpected sudden increase in demand, which led to a rise in freight prices. There is congestion in the West Mediterranean and South Asia routes. Waterways help with a lot of transportation. The demand for rolled containers is also on the rise. In the current season, they also had a supply of several new ships. However, the market is bigger for the season. Certain improvements occur, but the long-term effects continue to increase every week.
Drewry World Containers Index is a tool that measures the bi-weekly freight rates and changes for containers above 40 feet. Thus, it is important to understand the main criteria behind this increase. We learned that the main reason for the increasing freight rates is sudden, unexpected demand during the slow season. Another reason is the Red Sea Diversion. It is leading to congestion on the route. West Mediterranean and South Asia are the most affected ones. According to the details, the freight rate for Asia-North Europe FAK is increasing by $6,000 per 40 feet. The rates are growing every day based on several factors. There might be freight changes shortly.