Concerns about insufficient capacity continued to push up container freight rates over the past week, reaching levels not seen until the pandemic.
On June 6, the Drewry World Container Index (WCI) rose 12% month-on-month to $4,716 per box. Meanwhile, the Shanghai Containerized Freight Index (SCFI) was 3,184.87 points on June 7, up 4.6%, slowing from last week's double-digit percentage increase, which hit its highest level since August 2022.
The lack of capacity caused by ships diverted from the Red Sea via the Cape of Good Hope, increasing port congestion and rising demand have combined to lead to a surge in spot container prices on major routes.
HSBC Global Research commented in a report released today that it underestimated the timing and intensity of the earlier long-haul peak season, which has driven the recent rise in spot container freight rates.
Looking ahead, the company said: "We believe spot rates may still have momentum to move higher given strong recent forward ordering and good vessel utilisation in June. Congestion and equipment shortages are likely to remain problematic in the short term and may take several months to fully ease."
According to Drewry, Shanghai to Genoa rates have risen 17% in the past seven days to $6,664 per feu, while Shanghai to Rotterdam rates have risen 14% to $6,032 per feu.
Rates on the transpacific route from Shanghai to Los Angeles rose 11% to $5,975 per feu. Shanghai to New York sailings rose 6% to $7,214 per feu.
Looking ahead, Drewry said that "ex-China freight rates are expected to continue to rise next week due to the early arrival of the peak season".
HSBC said that frontloading of peak season demand could pose downside risks to container freight rates later in the second half of 2024.
