Drewry WCI falls for 3rd week on weak US-bound cargo demand
This decline is directly attributed to low demand for US-bound cargo and signals that the recent surge in US imports, which followed the temporary suspension of higher US tariffs, is unlikely to have a lasting impact as initially expected.
Drewry World Container Index dropped 5.73 per cent to $2,812 per FEU on July 3 due to weak demand for US-bound cargo. Freight rates on major routes, including Shanghaiâ€'Los Angeles and Shanghaiâ€'New York, fell sharply week-on-week, though they remain higher than 8 weeks ago. Drewry expects further declines amid oversupply and uncertainty surrounding future US tariffs and penalties on Chinese vessels.
Freight rates from Shanghai to Los Angeles fell 15 per cent to $3,180 per 40ft container over the past week, although spot rates remain 17 per cent higher compared to eight weeks ago (May 8). Similarly, spot rates from Shanghai to New York dropped 11 per cent to $5,070 per 40ft container but are still up 39 per cent over the same eight-week period. Drewry expects spot rates to continue declining next week due to excess capacity and weak demand.
Freight rates from Shanghai to Genoa decreased 9 per cent to $3,751 per 40ft container, while rates from Shanghai to Rotterdam increased 8 per cent to $3,468 per 40ft container.
However, Drewry's Container Forecaster anticipates a further weakening of the supply-demand balance in the second half of this year, which may lead to continued declines in spot rates. The volatility and timing of rate changes will depend on future US tariffs under Trump's policies and potential capacity adjustments related to the imposition of US penalties on Chinese vessels—factors that remain uncertain.
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