Global container freight rates continued to decline this week as increasing vessel capacity and weakening cargo demand placed further pressure on major east-west trade lanes, according to the latest Drewry World Container Index (WCI).
The WCI fell 4% week-on-week to $4,374 per 40-foot container, marking its second consecutive weekly decline as carriers continue to deploy additional capacity despite softer market conditions.
The steepest declines were recorded on the Transpacific trade. Spot freight rates from Shanghai to Los Angeles dropped 6% to $5,878 per FEU, while rates from Shanghai to New York fell 4% to $7,598 per FEU.
Drewry attributed the decline to rising shipping capacity and slowing cargo demand. The consultancy noted that carriers have reduced blank sailings on the Transpacific route, with six cancellations scheduled for next week compared with nine this week, indicating that more vessels are returning to service.
Despite the recent fall in rates, Drewry expects Transpacific freight prices to remain relatively stable over the coming week.
On the Asia-Europe trade lane, freight rates also weakened. Rates from Shanghai to Genoa declined 5% to $5,988 per FEU, while Shanghai to Rotterdam slipped 1% to $4,824 per FEU.
Although carriers have increased blank sailings on the Asia-Europe route to four next week, up from two the previous week, overall vessel capacity continues to expand faster than cargo demand, keeping downward pressure on spot rates. Drewry expects freight rates on the route to soften further in the near term.
The container shipping market is also closely monitoring developments in U.S. trade policy. The current 10% universal U.S. import tariff is due to expire on July 24, with revised tariff measures expected to be announced in early August, creating uncertainty for importers and supply chains.
Meanwhile, geopolitical tensions in the Middle East remain a key concern. Drewry said ongoing uncertainty surrounding the Strait of Hormuz and the broader U.S.-Iran conflict has prompted several ocean carriers to introduce Emergency Fuel Surcharges (EFS) from August to offset higher operating costs.
While these geopolitical developments have not yet halted the recent decline in spot freight rates, Drewry said developments in the Middle East and upcoming U.S. tariff decisions could significantly influence global container shipping markets in the coming weeks.
