Drewry WCI rises 3% to US$4,485 as Asia-Europe rates end 13-week slide

Drewry's World Container Index (WCI) rose 3% to US$4,485 per 40ft container in its assessment for Thursday 15 October, ending three straight weekly declines. Drewry said the rise was mainly due to higher Asia-Europe rates.

On Asia-Europe, Drewry said Shanghai to Rotterdam rose 6% to US$3,522 per 40ft and Shanghai to Genoa rose 7% to US$3,945. It was the first increase on that route after 13 consecutive weeks of decline. On the Transpacific, Shanghai to Los Angeles rose 3% to US$7,884, while Shanghai to New York fell 1% to US$10,075. Drewry said strong US import demand continues to support Transpacific rates.

Carriers are now trying to push Asia-Europe rates higher. Drewry said lines are seeking FAK (freight all kinds) rates of US$4,500 to US$4,800 per 40ft from 19 October. Container News reported in September that Hapag-Lloyd's FAK rates for sailings tariffed on or after 19 October are US$4,200 per 40ft to North Europe, US$4,600 to the West Mediterranean and Adriatic, and US$5,100 to Egypt, Turkiye and the East Mediterranean, including its Marine Fuel Recovery charge.

Drewry doubts these increases will hold. It said "successful implementation of these FAKs remains uncertain amid increased capacity", because blank sailings on Asia-Europe fall from six this week to two next week and ships are returning to the Suez Canal. Drewry expects Asia-Europe rates to stay stable next week.

Drewry's Intra-Asia Container Index fell 3% to US$1,453 per 40ft on 15 October as port congestion eased after China's Golden Week holiday. Shanghai to Jawaharlal Nehru Port (Nhava Sheva) fell 11% to US$3,370 and Shanghai to Singapore fell 7% to US$1,973. Average waiting times at Singapore fell from 50 to 34 hours in Week 41, and at Jawaharlal Nehru Port from 42 to 24 hours, Drewry said.

Gulf rates stay high. Drewry put Shanghai to Jebel Ali at US$8,416 per 40ft, citing the deteriorating situation in the Middle East. It said the intra-Asia index is 198% higher than a year ago, with high bunker costs adding to carrier costs.

Sourcing Journal reported on 15 October that the WCI is up more than 136% from US$1,899 on 26 February and has stayed above US$4,000 since the last week of June. It said Maersk raised its emergency fuel surcharge to 20% effective Monday, citing Reuters, and that CMA CGM set its emergency fuel surcharge at US$265 per 20ft container on head hauls from 1 October.

Asked about reports that the US may ease sanctions on "shadow fleet" tankers, Philip Damas of Drewry Supply Chain Advisors told Sourcing Journal that the effect on container fuel surcharges "will likely be limited", because removing tanker sanctions alone would not improve oil supply.

The latest Shanghai Containerized Freight Index (SCFI) available when this was written was 3,664.11 points on 9 October, according to the Shanghai Shipping Exchange.

Freight quotes for Sri Lankan cargo to and from China and Europe tend to follow movements on these main East-West lanes. A rebound on Asia-Europe after 13 weeks of falls means quotes for late October sailings may be higher than those from early October, at least on paper.

At the same time, Drewry's view is that extra Suez capacity may stop the increases from sticking. Intra-Asia rates, which matter for feeder and regional cargo, are easing, while Gulf rates stay very high. Fuel surcharges look set to stay, whatever happens to base rates.

For context, see last week's post on the 8 October WCI and our report on Suez returns and blank sailings.

• If you have Asia-Europe cargo ready, ask your forwarder for quotes on sailings before and after 19 October and compare them.
• Ask for the base rate and each surcharge, including emergency fuel and peak season charges, as separate lines.
• Check how long a quote stays valid. With FAK changes from 19 October, older quotes may lapse quickly.
• For Gulf shipments, confirm space, routing and war risk charges with the carrier before you book.
• Watch next week's WCI to see whether the Asia-Europe increase has held.