The cost to ship goods in containers to northern Europe from China fell to the lowest level since Houthi attacks in the Red Sea started diverting most of the world’s maritime fleet around southern Africa almost two years ago.
According to the Drewry World Container Index posted Thursday, the spot rate for a 40-foot container to Rotterdam from Shanghai slumped to $1,735 over the past week, the lowest level since mid-December 2023. That’s when carriers including MSC Mediterranean Shipping Co. and A.P. Moller-Maersk A/S began sailing en masse around the Cape of Good Hope to avoid missiles and drones from Yemen-based fighters protesting Israel’s war in Gaza.
The diversions, which squeezed container capacity and lifted short-term rates through mid-2024, are still taking place. According to the International Monetary Fund and Oxford University’s PortWatch tool, 17 cargo ships traversed the Suez Canal on Sept. 21, compared with 47 at the beginning of December 2023.
Uncertainty around US tariff policies since President Donald Trump returned to office in January created ups and downs in the container market this year, though the Shanghai-to-Rotterdam spot rate has fallen for eight straight weeks as capacity outstrips demand.
Drewry’s latest rate for goods transported to Los Angeles from Shanghai declined, reaching $2,311 for a 40-foot container, also the lowest since mid-December 2023. Port of LA Executive Director Gene Seroka has warned of a second-half weakening in demand from US importers.
Source: Bloomberg