Created on 05.12

US trade lane rates notch third consecutive weekly gain

Following the May Day holiday, the market had widely anticipated that shipping momentum would remain sluggish, potentially exerting downward pressure on freight rates. However, the latest Shanghai Containerized Freight Index (SCFI) continued its upward trajectory, marking a second consecutive week of gains—a development that exceeded market expectations. The SCFI released on May 8 rose by 42.81 points to 1,954.21 points, representing a week-on-week increase of 2.23%. All four major trade lanes saw simultaneous increases

Among them, rates for the US West Coast route increased by 3.82% per FEU, while the US East Coast rose by 3.28%. The Europe and Mediterranean routes saw gains of 4.93% and 1.34%, respectively. While freight rates on the Europe and US routes remain within a consolidation phase, market sentiment has clearly begun to improve.

Many industry insiders point to the situation in the Middle East as an unavoidable factor behind this rally, with persistent disruptions to shipping in the Persian Gulf. According to market sources, following the outbreak of conflict in the Middle East, approximately 140 container vessels have been stranded in the Persian Gulf, affecting about 500,000 TEU of capacity. Although this accounts for only roughly 1.5% of the global total fleet of 33 million TEU, its impact on market psychology has been significant.

Particularly with the traditional peak season approaching, shipping lines are already implementing space and schedule controls ("blank sailings"). Consequently, once demand shows slight signs of recovery, freight rates are easily pushed upward. Some in the industry are already speculating that a new round of general rate increases (GRI) may be implemented in the latter half of May.

Looking at spot market quotations for the first half of May, the overall tone remains one of "price stabilization."

US West Coast: Approximately $2,600–$2,800 per FEU;
US East Coast: Approximately $3,600–$3,800;
Europe: Holding steady at around $2,100–$2,300.

Overall volatility is not particularly high, but carriers' willingness to defend prices is markedly stronger than before. Notably, some annual contract rates for the US trade lanes have also begun to see modest upward adjustments.

Freight forwarders frankly state that the market is currently in a "preheating phase for price hikes." Carriers are stabilizing load factors while continuing capacity controls, with the clear objective of implementing planned rate increases for the latter half of May. Based on current targets, the aim is for the US West Coast to reclaim the $3,000/FEU level and for the US East Coast to breach the key $4,000 threshold.

Whether these increases can be successfully implemented ultimately hinges on export volumes from late May through June. If peak season cargo volumes materialize alongside ongoing tensions in the Middle East, rates will likely continue their upward trajectory. Conversely, if end-user demand fails to keep pace, the market could easily revert to a stalemate.

The latest SCFI (Shanghai Containerized Freight Index) for April 30

Nearly All Routes Post Gains:

Far East to Europe: $1,596/TEU, up $75 from the previous week, a 4.93% increase;
Far East to Mediterranean: $2,463/TEU, up $33 from the previous week, a 1.35% increase;
Far East to US West Coast: $2,826/FEU, up $104 from the previous week, a 3.82% increase;
Far East to US East Coast: $3,812/FEU, up $121 from the previous week, a 3.28% increase;
Persian Gulf Route: $3,937/TEU, down $14 from the previous week, a 0.4% decrease;
South America (Santos): $2,931/TEU, up $389 from the previous week, a 15.3% increase;
Australia/New Zealand: $1,167/TEU, up $100 from the previous week, a 9.4% increase.

Regarding Near-Oceania routes, rates remained flat for the Far East to Southeast Asia, Far East to Kansai (Japan), and Far East to Kanto (Japan) at /TEU∗∗.RatesfortheFarEasttoKorearouteincreasedby∗∗13/TEU.