Container spot freight rates have fallen for the first time in 13 weeks, according to the Shanghai Containerized Freight Index (SCFI).
The composite index fell to 3,674 in the week ending 12 July, a decline of 1.8%, ending a rally in which the measure of spot rates on various routes out of Asia rose steadily over the past three-and-a-half months.
The SCFI has risen by 117% since 29 March, when it stood at 1,730 points.
The rally was brought to a halt by a weekly drop of 5.6% in the trade from Asia to the US West Coast, where rates were down $458 to $7,645 per 40-foot equivalent unit (feu) in the week to 12 July.
Rates from Asia to the US East Coast also dipped $64, but remain elevated at $9,881 per feu.
The fall comes amid reports that equipment shortages and port congestion are improving from the severe levels experienced recently.
Highest since Covid
Market reports indicate that liners are pricing Asia-US West Coast moderately lower for the second half of July.
The figures being quoted are closer to between $7,000 and $7,500 per feu, according to an equity note from Jefferies.
From Asia to the US East Coast, forward rates are more resilient and are priced at more than $9,000 per feu, the analyst added.
Despite the decline, spot rates remain at their highest levels at any time barring the Covid period from June 2021 to August 2022.
The SCFI composite index remains underpinned by stable rates from Asia to North Europe, which were $194 higher over the week at $5,051 per teu.
“Peak season volumes have driven the market significantly higher, with Red Sea rerouting, strong demand and congestion all combining to boost freight rates to highs only seen previously during the 2021/2022 up-cycle,” Jefferies notes.
Spot rates are expected to remain high while there is no sign of a resolution to the crisis in the Red Sea.
There are also worries that the threat of strikes in US East Coast ports could add to stress on the supply chain.
