The Drewry World Container Index plunges 7% to $2,368! Hitting the lowest point after the epidemic, has the shipping market reached an inflection point?

Source: Drewry World Container Index, Drewry Supply Chain Advisors

Attention, foreign traders! The latest issue of the Drewry World Container Index (WCI) has sent us another market warning. This set of data released on March 13th is a bit interesting. Let's highlight:

Now the global comprehensive freight rate of 40-foot containers has dropped to $2,368, which is 7% lower than last week. This figure looks 77% less than when the epidemic was at its craziest (US $10,377 in September 2021). It can be said that it has squeezed out the freight rate bubble brought about by the epidemic. But then again, compared with the average level of US $1,420 before the epidemic in 2019, it is still 67% higher now, indicating that the shipping market as a whole is still hotter than normal.

The market has been quite interesting in the past three months of this year. The average freight rate is US $3,205 per large container, which is a bit higher than the average line of US $2,884 in the past ten years. But if you ask me to say, this "ten-year average" is mixed with the inflated elements of the 2020-2022 epidemic market. It is really hard to say how long this price can last now.

Let's take a look at the specific route:

• Freight rates on European and American routes collectively plunged: the Shanghai → Genoa line plummeted 11% to US $3,333, the US West line (Shanghai → Los Angeles) fell 8% to US $2,906, the US East line (Shanghai → New York) fell 7% to US $4,038, and the European line (Shanghai → Rotterdam) also shrank 5% to US $2,512
• Interestingly, the European return line bucked the trend and rose slightly: the Rotterdam → Shanghai line rose 1% to $490, and the two transatlantic lines of New York → Rotterdam and Rotterdam → New York also rose slightly
• The return route from the West of the United States is as stable as Mount Tai: the price of the Los Angeles → Shanghai line remains unchanged

Drewry's group of analysts predict that as various Carrier companies begin to send more capacity, freight rates may fall again starting next week. Let me tell you, the current market is like riding a roller coaster. Foreign trade bosses have to keep an eye on it. Those who should lock the price quickly, and those who should adjust the pace of shipments have to make early plans.