Global demand continues to decline, and whether the calculation is based on growth in TEU*Miles or as an annualised percentage over 2019, one thing is very clear - the supply/demand balance is under a lot of pressure, says Sea-Intelligence in its latest update.

"To maintain the ultra-high spot rate levels, a nominal utilisation in excess of 92-93 percent needs to be sustained on the Transpacific with the threshold on Asia-Europe being 85 percent. On the Transpacific, utilisation dropped below 90 percent for much of 2022, becoming a catalyst for the continued freight rate drop. In August, utilisation crossed the 90 percent mark but only just, still falling short of the 92 percent threshold to indicate a rate increase."

On Asia-Europe, utilisation has been dropping even further, the update added. "As we can see in Figure 1, 2022 utilisation on Asia-Europe has been consistently below the 85 percent threshold to trigger a rate increase. Although the utilisation improved in August to 74 percent from 72 percent in July, the rolling 2-month average saw a further decline from 76 percent to 73 percent."

The latest data simply reconfirms what has been the case since Spring 2022, i.e. there is no underlying structural support for the high rates on Transpacific and Asia-Europe, the update added.

Drewry WCI down 3%
Drewry's composite World Container Index (WCI) decreased 3 percent to $3,383.46 per 40ft container this week, the 34th consecutive weekly decrease, and down 66 percent compared with the same week last year.

The index is now 67 percent below the peak of $10,377 reached in September 2021, 10 percent lower than the 5-year average of $3,740, indicating a return to more normal prices, but 138 percent higher than average 2019 (pre-pandemic) rates of $1,420.

Freight rates on Shanghai–Los Angeles dropped 5 percent to $2,497 per FEU. Spot rates on Shanghai–Genoa and Shanghai–Rotterdam fell 3 percent each to $4,614 and $4,436 per 40ft box, respectively.

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