Container Rates Triple as Global Trade Surges

Global goods trade is bouncing back after last year’s slump, pushing up shipping rates and straining capacity. This trend brings back memories of the "Covid-19" chaos when skyrocketing freight rates and disrupted supply chains dominated the headlines.

Key Highlights

• Container Rates Surge: Container rates on key routes have more than tripled this year. The cost for a 40-foot container to the US West Coast from Asia jumped 13.4% to $4,915 in the last week, marking the fifth straight weekly increase.
• Port Congestion: Ports in Asia, like Qingdao, Shanghai, and Ningbo, face delays of 1-4 days due to "vessel bunching" and harsh weather. Similar delays are seen in Singapore and Malaysia.
• Import Surge in the US: Container imports through the top 10 US ports have risen for seven consecutive months, with a three-month trailing average gain of 19.1%.

Expert Insights

“This situation will bring back memories of the chaos and sky-rocketing ocean freight rates during the pandemic. Shippers have learned lessons from Covid-19 and some are bringing their imports forward, ahead of the peak season and the potential for a capacity squeeze.” – Emily Stausbøll, a senior shipping analyst at Xeneta.

John McCown, a veteran shipping analyst, highlighted the strong gains in container imports, attributing them to underlying economic activity.

Port of Los Angeles Report

In April, the Port of Los Angeles posted its 11th straight month of year-over-year gains in exports, processing 770,337 total TEUs, up 12% from last year.

Total imports rose 21% YoY, with exports up 51%. Daniel Hackett from Hackett Associates noted that while the West Coast shows stronger growth, year-over-year growth rates are expected to slow in the second half of the year compared to the first half.

On Pre-Pandemic Comparisons:

“Pre-pandemic comparisons are tricky. Comparing 2019 to 2024, the growth on the West Coast is just a 5% increase, whereas the East Coast saw a 14% increase. Peak season forecasting has become less predictable due to changes during the pandemic.” – Daniel Hackett, Hackett Associates

Sources: Bloomberg | Supply Chain Dive