Executive Briefings

Container Rates Continue to Experience Volatility, Especially on Shanghai Routes

The volatility of global spot freight rates since the start of 2015 has continued to increase in comparison to 2014, according to rate assessments on 11 routes gathered by the World Container Index (WCI). Price turbulence on the globally important Asia-to-Europe routes has been particularly high in 2015 with monthly volatility increasing 43 percent on average in comparison to 2014.

The monthly volatility (a measure of how widely prices fluctuate in a four-week period and therefore an indicator of the risk in a market) has increased by 14 percent on the WCI composite index, which is a weighted average of all 11 underlying routes in the first 20 weeks of 2015.

“The two most volatile routes among the 11 we track are Shanghai-Rotterdam and Shanghai-Genoa, with weekly rate increases of $1,000 or more seen during some weeks and monthly volatility of over 40 percent since the start of this year,” said Richard Heath, director of WCI.  Taking all routes into account, the WCI composite index went from $2,092 per 40-foot container in late February to $1,263/40ft in late April, before increasing again to $1,611 on 14 May.

Philip Damas, director at Drewry, which jointly owns WCI alongside Cleartrade Exchange, said: “The World Container Index assessed by Drewry tracks and documents what is an increasingly volatile market. The reduction of spot rates is welcome by most shippers, but many non-contract shippers are not currently equipped to cope with huge volatility in their freight costs.”

The World Container Index is the only weekly container pricing index based on actual agreed freight assessments reported by industry players in Asia, Europe and the U.S. and is not financed or backed by either shipper or carrier interests.

Source: Drewry

The monthly volatility (a measure of how widely prices fluctuate in a four-week period and therefore an indicator of the risk in a market) has increased by 14 percent on the WCI composite index, which is a weighted average of all 11 underlying routes in the first 20 weeks of 2015.

“The two most volatile routes among the 11 we track are Shanghai-Rotterdam and Shanghai-Genoa, with weekly rate increases of $1,000 or more seen during some weeks and monthly volatility of over 40 percent since the start of this year,” said Richard Heath, director of WCI.  Taking all routes into account, the WCI composite index went from $2,092 per 40-foot container in late February to $1,263/40ft in late April, before increasing again to $1,611 on 14 May.

Philip Damas, director at Drewry, which jointly owns WCI alongside Cleartrade Exchange, said: “The World Container Index assessed by Drewry tracks and documents what is an increasingly volatile market. The reduction of spot rates is welcome by most shippers, but many non-contract shippers are not currently equipped to cope with huge volatility in their freight costs.”

The World Container Index is the only weekly container pricing index based on actual agreed freight assessments reported by industry players in Asia, Europe and the U.S. and is not financed or backed by either shipper or carrier interests.

Source: Drewry