U.S.-China trade issues lead to first drop in container spot rates

Posted on July 29, 2024   |  

Spot rates for shipping containers dropped for the first time in almost 3 months due to cooling demand after U.S. tariffs on Chinese goods and trade disruptions.

The Drewry World Container Index for eight major trade lanes fell by 2.2% to $5,806 for a 40-foot container, ending a 12-week rise.

Current rates remain three times higher than at the end of 2023 when ships diverted from the Red Sea to avoid Houthi attacks.

Rates surged in the second quarter due to strong U.S. demand and importers stocking up ahead of higher tariffs on Chinese products, and concerns about a possible dockworker strike on the East and Gulf Coasts.

The rate from Shanghai to Los Angeles dropped for the second week in a row, falling 4.9% to $6,934, while the Shanghai-to-Rotterdam rate stayed steady at $8,026.

Spot rates, including premiums and surcharges on Asia-US West Coast services, decreased by 4% to $7,738, and rates to northern Europe from Asia fell by 2% to $8,420.

The Port of Los Angeles and Long Beach saw container volumes increase during the first half of 2024 compared to the previous year.

As of Tuesday, wait times for berth space in Singapore, the world's largest transshipment hub, ranged from 50 to 80 hours, down from 70 to 110 hours in mid-June.