Latest news with #Drewry
Yahoo
4 days ago
- Business
- Yahoo
Drewry: Ocean rates fall for fifth straight week
Drewry's World Container Index (WCI) tracking ocean freight rates declined 2.6% this week, marking the fifth consecutive week of decreases. The analyst in an update said that the trend indicates a significant shift in market dynamics following a volatile period induced by increased U.S. tariffs in April, and a subsequent China-U.S. tariff pause. Although the tariffs initially caused a lagged market reaction that saw rates climbing in May and surging into early June, this upward trajectory has not been sustained as rates have steadily dropped since mid-June. Trans-Pacific spot rates have also felt the impact, with prices from Shanghai to Los Angeles currently down by 4% to $2,817 per forty foot equivalent unit (FEU). Similarly, rates on the Shanghai to New York route have declined by 6%, to $4,539 per FEU. Drewry said that despite these decreases, rates on both lanes remain higher than levels observed 10 weeks ago when tariff anxieties were initially escalating. Rates from Shanghai to Los Angeles are still up 4%, while those to New York have climbed by 24% compared to the figures on May 8. The overarching decline in spot rates can largely be attributed to weakening demand, which is expected to persist according to Drewry's Container Forecaster. The outlook anticipates a further weakening of the supply-demand balance in the second half of 2025, which could invariably result in continued decreases in spot rates. The future volatility and rate adjustments will hinge on subsequent trade policies, particularly any additional tariffs imposed by the Trump administration, and on potential capacity changes prompted by U.S. penalties on Chinese shipping lines. Find more articles by Stuart Chirls of Oakland containers off 10% as 'recalibration' hits ocean supply chain China could block sale of port terminals: Report Amid uncertainty, sliding Asia-US container rates are a sure thing Report: White House maritime chief leaving The post Drewry: Ocean rates fall for fifth straight week appeared first on FreightWaves.
Fibre2Fashion
5 days ago
- Business
- Fibre2Fashion
Drewry WCI falls for fifth week, downtrend may persist
The Drewry World Container Index (WCI)—a composite measure of container freight rates—declined for the fifth consecutive week, falling by 2.61 per cent to $2,602 per 40-foot equivalent unit (FEU) on July 17, down from $2,672 per FEU the previous week. This continued decline follows a period of volatility triggered by higher US tariffs announced in April. The market reaction was delayed by about a month, with rates beginning to rise in May and peaking in the first week of June. However, the trend has since reversed, with rates consistently falling since mid-June, indicating that the initial impact of the tariffs was short-lived. Drewry WCI fell for the 5th straight week, dropping 2.61 per cent to $2,602 per FEU on July 17. Rates have declined since mid-June, reversing gains from earlier tariff-driven hikes. Transpacific spot rates slipped further, though remain above early May levels. Drewry forecasts continued rate declines in H2 2025, citing weak demand and uncertainty over future US tariffs and penalties on Chinese vessels. Transpacific spot rates fell this week, with rates on the Shanghai–Los Angeles route down 4 per cent to $2,817 per FEU, and Shanghai–New York down 6 per cent to $4,539 per FEU. Despite the recent decline, both lanes remain above their levels from 10 weeks ago, when tariff concerns first began to drive rates higher. Spot rates from Shanghai to Los Angeles are still 4 per cent higher, while rates to New York are 24 per cent higher than on May 8. Drewry expects rates on these trade lanes to continue declining due to weak demand. Rates from Shanghai to Rotterdam dipped 1 per cent to $3,334 per 40-foot container, while Shanghai to Genoa fell 1 per cent to $3,450 per 40-foot container. Conversely, freight rates increased on several backhaul routes: Rotterdam to Shanghai rose 2 per cent to $495, New York to Rotterdam edged up 1 per cent to $876, and Rotterdam to New York increased by 1 per cent to $2,001 per 40-foot container. Drewry's Container Forecaster expects the supply-demand balance to weaken again in the second half of 2025, which will lead to further declines in spot rates. The volatility and timing of rate movements will largely depend on President Trump's future tariff decisions and potential capacity shifts related to US penalties on Chinese ships, which remain uncertain. Fibre2Fashion News Desk (KUL)
Yahoo
11-07-2025
- Business
- Yahoo
Too Much Space, Too Little Demand: China-US Freight Rates Keep Crashing
Ocean freight rates out of China to the U.S. are still falling after their strong spike in May, and are expected to further decline through the coming months, especially if a projected end-of-summer demand slump plays out. Drewry's July Container Forecaster projects the supply-demand balance to weaken again in the second half of the year, which would cause the spot rate dip. More from Sourcing Journal Three-Day Monsoon Stalls Cargo Unloading at Bangladesh's Biggest Port US Ports Urge Delay on 100% China Crane Tariff Amid Supply Gaps, Soaring Costs Watchdog: US Shipbuilding Aid Programs Lack Clear Goals to Power Trump's Maritime Push While there was much concern over the amount of space available on container ships in May when the U.S. first rolled back its tariffs on China for 90 days, the pendulum has heavily swung back to overcapacity on the Pacific Ocean, which is a catalyst for lower freight rates. According to Drewry, the volatility and timing of rate changes will depend on President Donald Trump's future tariffs and on capacity changes related to the introduction of the U.S. penalties on Chinese ships, which are uncertain. Container shipping consultancy Linerlytica noted that increased clarity on the tariffs will reduce the need for shippers to rush out shipments before the new Aug. 1 deadline, further pressuring trans-Pacific freight rates. Major indices are showing more declines, with the Drewry World Container Index dipping for the fourth straight week from China to the U.S. East and West Coasts. As of Thursday, freight rates from Shanghai to Los Angeles decreased 8 percent to $2,931 per 40-foot container, while Shanghai-to-New York rates dipped 5 percent to $4,839. Drewry expects spot rates to continue to decline next week as well due to excess capacity and weak demand. Last Friday, the Shanghai Containerized Freight Index from Shanghai to the U.S. West Coast plunged 19 percent from the week prior to $2,089 per container. The East Coast counterpart dropped 13 percent to $4,124 on average. Despite the U.S. and China agreeing to a framework for a trade deal that lowered tariffs back down to 55 percent, shipments remain far down from 2024 levels, contributing to the rapid rate decline throughout June. In June, U.S. imports of containerized goods from China still fell 28.3 percent year over year to 639,300 20-foot equivalent units (TEUs), according to a monthly report from supply chain technology provider Descartes. China's share of total U.S. container imports hit a four-year low at 28.8 percent, reflecting the sustained impact of the elevated tariffs. With fewer Chinese cargo expected to enter the U.S. in August into the fall months, ocean carriers will be monitoring capacity levels to hold rates up. Mediterranean Shipping Company (MSC) is the first of the major carriers to withdraw a service line 'until further notice' in an effort to get excess capacity out of the trans-Pacific trade lane. The suspended Pearl service connected ports including Vietnam's Cai Mep and Hai Phong; Hong Kong; China's Yantian, Xiamen and Nansha; and Long Beach and Oakland in the U.S. The last sailing on the Pearl service will be made by the 8,819-TEU MSC Elodie from Xiamen on July 13, according to Linerlytica. Other carriers including Hong Kong-based TS Lines and China United Lines, both of which reintroduced service lines when demand opened up, again pulled the plug on their sailings. Such moves remain 'insufficient' to bring stability back to what Linerlytica called a 'very crowded' trans-Pacific market with 23 carriers currently active on the Far East-to-U.S. route. The consultancy is not convinced the cuts from MSC and others will make much of a dent in the trend. 'Further capacity cuts are required in the next four weeks, with the removal of some 30,000 TEUs per week needed before carriers will have any realistic chance of reversing the rate slump,' Linerlytica said. As rates seem more likely to drift downward, the level of capacity on container vessels appears to be more volatile than ever—making rates more unpredictable. Container shipping research firm Sea-Intelligence says total capacity on the Asia to North American West Coast route has nearly quadrupled compared to 2012 levels. For the past three years, capacity volatility has been ranging around 250 percent higher than in 2012, with variability often reaching up to 300 percent higher. According to Sea-Intelligence CEO Alan Murphy, this volatility is caused by blank sailings, vessels sailing off-schedule and vessels of varying size on the same service. 'To the degree that spot rates are driven by the actual weekly supply-demand balance, this capacity volatility means that the underlying driver for spot rate formation on Asia-NAWC has become progressively more unstable over the past 13 years—creating a much more volatile and unpredictable spot rate in itself,' Murphy said. To calculate the volatility, Sea-Intelligence took the absolute value of the week-over-week change in capacity, so that any change is recorded as a positive value. From there, the firm calculated capacity volatility as a 52-week moving average.
Yahoo
11-07-2025
- Business
- Yahoo
Too Much Space, Too Little Demand: China-US Freight Rates Keep Crashing
Ocean freight rates out of China to the U.S. are still falling after their strong spike in May, and are expected to further decline through the coming months, especially if a projected end-of-summer demand slump plays out. Drewry's July Container Forecaster projects the supply-demand balance to weaken again in the second half of the year, which would cause the spot rate dip. More from Sourcing Journal Three-Day Monsoon Stalls Cargo Unloading at Bangladesh's Biggest Port US Ports Urge Delay on 100% China Crane Tariff Amid Supply Gaps, Soaring Costs Watchdog: US Shipbuilding Aid Programs Lack Clear Goals to Power Trump's Maritime Push While there was much concern over the amount of space available on container ships in May when the U.S. first rolled back its tariffs on China for 90 days, the pendulum has heavily swung back to overcapacity on the Pacific Ocean, which is a catalyst for lower freight rates. According to Drewry, the volatility and timing of rate changes will depend on President Donald Trump's future tariffs and on capacity changes related to the introduction of the U.S. penalties on Chinese ships, which are uncertain. Container shipping consultancy Linerlytica noted that increased clarity on the tariffs will reduce the need for shippers to rush out shipments before the new Aug. 1 deadline, further pressuring trans-Pacific freight rates. Major indices are showing more declines, with the Drewry World Container Index dipping for the fourth straight week from China to the U.S. East and West Coasts. As of Thursday, freight rates from Shanghai to Los Angeles decreased 8 percent to $2,931 per 40-foot container, while Shanghai-to-New York rates dipped 5 percent to $4,839. Drewry expects spot rates to continue to decline next week as well due to excess capacity and weak demand. Last Friday, the Shanghai Containerized Freight Index from Shanghai to the U.S. West Coast plunged 19 percent from the week prior to $2,089 per container. The East Coast counterpart dropped 13 percent to $4,124 on average. Despite the U.S. and China agreeing to a framework for a trade deal that lowered tariffs back down to 55 percent, shipments remain far down from 2024 levels, contributing to the rapid rate decline throughout June. In June, U.S. imports of containerized goods from China still fell 28.3 percent year over year to 639,300 20-foot equivalent units (TEUs), according to a monthly report from supply chain technology provider Descartes. China's share of total U.S. container imports hit a four-year low at 28.8 percent, reflecting the sustained impact of the elevated tariffs. With fewer Chinese cargo expected to enter the U.S. in August into the fall months, ocean carriers will be monitoring capacity levels to hold rates up. Mediterranean Shipping Company (MSC) is the first of the major carriers to withdraw a service line 'until further notice' in an effort to get excess capacity out of the trans-Pacific trade lane. The suspended Pearl service connected ports including Vietnam's Cai Mep and Hai Phong; Hong Kong; China's Yantian, Xiamen and Nansha; and Long Beach and Oakland in the U.S. The last sailing on the Pearl service will be made by the 8,819-TEU MSC Elodie from Xiamen on July 13, according to Linerlytica. Other carriers including Hong Kong-based TS Lines and China United Lines, both of which reintroduced service lines when demand opened up, again pulled the plug on their sailings. Such moves remain 'insufficient' to bring stability back to what Linerlytica called a 'very crowded' trans-Pacific market with 23 carriers currently active on the Far East-to-U.S. route. The consultancy is not convinced the cuts from MSC and others will make much of a dent in the trend. 'Further capacity cuts are required in the next four weeks, with the removal of some 30,000 TEUs per week needed before carriers will have any realistic chance of reversing the rate slump,' Linerlytica said. As rates seem more likely to drift downward, the level of capacity on container vessels appears to be more volatile than ever—making rates more unpredictable. Container shipping research firm Sea-Intelligence says total capacity on the Asia to North American West Coast route has nearly quadrupled compared to 2012 levels. For the past three years, capacity volatility has been ranging around 250 percent higher than in 2012, with variability often reaching up to 300 percent higher. According to Sea-Intelligence CEO Alan Murphy, this volatility is caused by blank sailings, vessels sailing off-schedule and vessels of varying size on the same service. 'To the degree that spot rates are driven by the actual weekly supply-demand balance, this capacity volatility means that the underlying driver for spot rate formation on Asia-NAWC has become progressively more unstable over the past 13 years—creating a much more volatile and unpredictable spot rate in itself,' Murphy said. To calculate the volatility, Sea-Intelligence took the absolute value of the week-over-week change in capacity, so that any change is recorded as a positive value. From there, the firm calculated capacity volatility as a 52-week moving average.
Business Times
09-07-2025
- Business
- Business Times
Surging UK shipping costs threaten to deliver a new price shock
[LONDON] The cost of shipping goods from China to the UK has surged due to ripple effects of the US trade war, threatening to push up consumer prices and complicate the Bank of England's plan to keep nudging down interest rates. The price of transporting a 40-foot container from China has jumped about 60 per cent over the past three months to US$3,305, according to data from shipping analytics company Xeneta. A separate weekly gauge published by maritime consultancy Drewry showed a similar rise. The increase was fuelled by demand from American businesses that have been rushing to import products before US President Donald Trump's latest round of tariff hikes kick in. That's absorbed capacity and pushed up the cost of shipping on other trade routes to mainland Europe and the UK. It's possible that the increase will prove to be just a short-lived side effect of the shifting US trade policies, and shipping costs remain well below the levels seen after the pandemic. But economists say it is likely to at least temporarily push up UK consumer prices given that British retailers are already dealing with razor-thin profit margins and will likely pass on the added expense. 'Inflated freight prices continue to add pressure to retail supply chains,' said Andrew Opie, director of food and sustainability at the British Retail Consortium. 'In a low-margin, competitive market, shipping adds to already significant costs.' The shift is injecting another element of uncertainty into the inflation outlook just as the Bank of England is looking to continue gradually lowering interest rates and the economy shows signs of slowing. But inflation has remained well above the bank's 2 per cent target and Jonathan Steenberg, UK and Ireland economist at Coface, estimates that the shipping costs may add as much as 0.3 percentage points to the consumer-price index in the third quarter, pushing it to a 3.6 per cent rate. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Over the longer term, it's possible that Trump's tariff increases could have a disinflationary impact if Chinese businesses cut prices to expand their exports to the UK to make up for slower US sales. Yet for now, the cost increases are adding another squeeze to UK businesses that have already been cutting jobs and raising prices to compensate for an increase in payroll taxes and the minimum wage. Almost 40 per cent of firms with at least 10 employees in June said they were concerned about supply chains over the next year, up five percentage points from March, according to a recent data published by the Office for National Statistics. 'We are a pretty open economy in the UK,' Steenberg said. 'We saw a more extreme version of this back in 2021-2022, when we saw this clearly feed into import prices and the prices of several goods. So we are quite sensitive to this.' Since many companies rely on longer-term shipping contracts, the recent rates will likely continue to be felt in the months ahead. Peter Sand, chief analyst at Xeneta, said the costs of shipping have also been affected by labour shortages and maintenance works at northern European ports. Demand for shipping into the UK has also been high, with Chinese goods exports into Britain climbing 11 per cent year on year in April. Sand said his firm 'expects the lions' share of these inefficiencies to stick around throughout the year'. 'It all adds up,' he said. BLOOMBERG
