It is indisputable that over the past five weeks, spot freight rates on the main east-west routes have risen faster than any analyst, shipping company or freight forwarder could have predicted. As the world looks for the first signs of a top, the obvious question is: how high will the peak be?
Since May, the WCI has risen by "+1%, +16%, +11%, +16%, +4% and +12%" respectively, and finally closed at $4,716/FEU, up about $2,000/FEU. It is up 181% compared with the same period last year; it is 232% higher than the pre-epidemic average of $1,420/FEU in 2019.
Among them, routes departing from China have risen across the board. Shanghai-Genoa rose to $6,664/FEU, Shanghai-Rotterdam rose to $6,032/FEU, Shanghai-Los Angeles rose to $5,975/FEU, and Shanghai-New York rose to $7,214/FEU.
Drewry expects freight rates outside China to continue to rise next week due to the arrival of the early peak season.
"If the increase in demand is due to an earlier peak season, we can expect demand pressures to subside within a few months, and earlier than usual," said Judah Levine, chief analyst at Freightos. He added, "Just as freight rates climbed before the Chinese New Year due to a combination of demand and capacity constraints in the months before the diversion, and fell back after demand eased, freight rates and congestion should also fall when peak season demand slows, although we can expect freight rates to not fall below April levels until the Red Sea crisis is resolved."
June is the peak season for China's container market, and container prices have soared. The average price of a 40-foot high-box in major Chinese ports was $2,240 in April, and rose to $3,250 in May, an overall increase of 45%. During the epidemic in September 2021, the price index soared to a high of $7,178.