Sky-High Ocean Shipping Rates May Have Finally Peaked

Ocean container rates remain exceptionally high but may have finally hit their ceiling. Spot rates have not only stopped rising, they’ve pulled back by single digits. Is this a new plateau or the start of a longer-term reversal as liner alliances bring more capacity back online?

The share of idle container-ship tonnage is declining. The number of box ships being chartered by carriers is increasing. Charter rates are on the rise. All of this implies there will be more slots available for containers, a headwind for freight rates.

Spot rates halt their ascent: “As carriers restore capacity, ocean rates dipped slightly,” said Freightos Chief Marketing Officer Eytan Buchman in the company’s weekly report. The Freightos Baltic Daily Index tracks the price to ship a forty-foot equivalent unit (FEU) container in various trades. Rates peaked on July 8 on the China-West Coast route (SONAR: FBXD.CNAW) and on July 7 on the China-East Coast route (SONAR: FBXD.CNAE). China-West Coast rates hit a high of $2,855 per FEU before falling 4% to $2,753 per FEU on Wednesday — still more than 65% above rates in the past two years…

View entirety: Freightwaves