The rates for shipping containers to the US from East Asia and China continue to drop, and are nearing the levels witnessed at the start of the pandemic, pressed lower by falling demand, China’s ongoing zero-COVID policies, and Chinese factory closures for the Golden Week holiday.
As per the Baltic Index, the rates on the west coast are 85% less when compared with the same time last year, while the rates are 65% lower on the east coast.
Judah Levine, head researcher at Freightos said that rates were last at current levels in June 2020, which was when prices first started rising during the pandemic. The price is just 5% higher when compared to October 2018 when importers were rushing to get Chinese goods in January 2019 before the rollout of tariffs. He also said that industry experts have predicted that rates could drop soon below the break-even point which means liners can even move containers at a loss. Also, the larger liners are hoping that the shift in market dynamics will move the smaller liners out of the market, adding blank sailings could help fix and stabilize rates.