The average freight rates for shipping goods around the world are making minimal declines, but rates are still considerably higher than they were last year.
According to Drewry Shipping Consultants’ World Container Index for the week ended Thursday, the average container freight rate across eight major routes to and from the U.S., Europe and Asia is down 3.6 percent, though the number is up 43 percent from the same time in 2016.
The average rate to ship freight on those key routes is $1,587 per 40-foot container, which still comes in $118 below the five-year average of $1,705, despite the sizable increase over last year.
“The spot rates on the Asia-Europe trade continue to tumble, and as a result, the World Container Index on Shanghai to Rotterdam declined by 3 percent or $58 to $1,811 for a 40ft box,” Drewry said. “Similarly, GRIs [general rate increase] on the Transpacific trade are also losing ground, but at a slower pace.”
Rates between Shanghai are up the most, at 71 percent higher than this time last year to $1,407. Rates from Rotterdam to Shanghai are down more than $200 from earlier in May, but still 62 percent higher year over year. Freight rates from New York to Rotterdam were down the most, falling 7 percent over last year to $473.
In April, Drewry said the average container freight rate was up 102 percent over the same period in 2016 thanks to pressure from overcapacity. That overcapacity has served to suppress rates on intra-Asia routes despite the fact that container trade within Asia rose 23.5 percent in the first quarter of the year. Rates are just starting to tick slightly up from the roughly $750 per TEU (20-foot equivalent unit) rate seen for the better part of the last 18 months.
The busiest route within Asia was between China and Southeast Asia, which saw 36 percent growth to 3.4 million TEUs. Growth on that route is expected to continue as trade expands.
“If the latest container data is to be believed trade between the two blocs went into overdrive at the start of this year,” Drewry said in its newsletter.