Container leasing rates between China and US triple amidst demand recovery

Posted on February 16, 2024   |  

Global shipping rates surged after the Red Sea crisis, with China-US container leasing rates tripling in three months.

Expectations of container demand recovery align with the US economy's resilience, as GDP grew by 3.3% in Q4 2023.

December's reports on personal income and spending showed lower inflation and strong household spending, boosting the economic outlook.

China's demand for ocean container freight to the US increased, as seen in a 38.6% rise in TEU volumes at the Port of Los Angeles.

Transit times via the Cape of Good Hope increased by 2-3 weeks, leading to a notable shift in supply-demand dynamics.

Freight rates on the China to North America east coast route doubled between December 15, 2023, and January 19, 2024, reaching approximately $5000.

While higher leasing rates may benefit shipping lines temporarily, sustained elevated costs could squeeze profit margins for manufacturers and exporters in the long term.