The Global Container Index (WCI), recognized as an independent and global reference for related contracts, decreased to $4,389 for each 40-foot container last week. This 1% decrease is primarily due to falling rates on Transpacific and Asia-Europe trade routes and an improvement in traffic conditions at Chinese ports.
Analysis of Trade Routes
On the Transpacific trade route, rates from Shanghai to New York have dropped by 3% to $9,303 for each 40-foot container, while rates from Shanghai to Los Angeles have remained stable at $7,539 for each 40-foot container. The traffic situation at major Chinese ports, which had been challenging for several weeks, is gradually improving, with the average waiting time for ships in Shanghai reduced to 35 hours last week. According to Drewry's analyses, three empty voyages have been announced for next week, down from five empty voyages this week, indicating an increase in effective capacity. With the increase in effective capacity, rates are expected to remain under downward pressure.
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Situation on Asia-Europe Route
On the Asia-Europe route, rates from Shanghai to Rotterdam have decreased by 2% to $3,615 for each 40-foot container, while rates from Shanghai to Genoa have remained stable at $4,166 for each 40-foot container. Shipping companies are attempting to increase rates in mid-November to strengthen their position ahead of next year's contract negotiations. However, effective capacity in the market continues to rise, as the resumption of transit through the Suez Canal has reduced transit times and freed up additional capacity. Additionally, according to Drewry's analyses, five empty voyages have been announced for next week, down from eight empty voyages this week. This sufficient capacity situation creates uncertainty regarding the implementation of rate increases, and rates are expected to remain stable next week.
The container shipping market on East-West routes remains under pressure, with improved availability of capacity and weak demand impacting shipping rates. Transit through the Suez Canal is increasing, and 60% of Asia-Europe capacity is now utilizing the Suez Canal route. Last week, 53 ships passed through both sides of the canal. A key risk for carriers exists, as a rapid return to the Suez Canal route could lead to overlapping arrivals of ships from the Suez and COGH routes, increasing the likelihood of ship congestion and cargo traffic at European ports. The situation in the Strait of Hormuz also remains uncertain, with the United States continuing a new round of limited attacks against Iran. Furthermore, the possibility of a strike by guards at the ports of Los Angeles and Long Beach poses additional risks for carriers.
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