With a 28% slump in freight rates, container shipping has experienced its worst quarter in the past 20 years, reports Bimco.
Average rates for Chinese exports have fallen by 28% since the beginning of the year, reports Niels Rasmussen, shipping analyst at the shipping organization Bimco. The CCFI rate index, which shows spot freight rates from Shanghai, has fallen from 1,548 points at the beginning of the year to 1,112 points at the end of the first quarter. This corresponds to a decline of as much as -46%.
According to Bimco, this was the biggest quarterly loss since the index was introduced in 2009. Since 2006, the CCFI had only fallen by an average of 2% in the first quarter and only four times by more than 10%. The second worst year was 2023, when average rates fell by 24% between the start and end of the first quarter, according to Rasmussen.
Rates fell despite a promising start to the year, when export market volumes from East and Southeast Asia grew by 20% year-on-year in January. At the same time, however, the detour of ships around the Cape of Good Hope continued to absorb 10-12% of fleet capacity from the market.
Among the most important East-West trade routes, the trade routes to Europe and the Mediterranean recorded the largest declines in average rates at 33% and 32% respectively. However, the losses in North-South traffic were even more serious. Rates to South Africa, Australia/New Zealand, South America and West Africa fell by 40%, 38%, 35% and 26% respectively. The only exception was trade between China and Japan.
Despite the negative development, the average rates at the end of the first quarter were only 8% below the previous year’s figure and still 39% above the 2019 figure.
However, the introduction of new US import tariffs under President Donald Trump and the retaliatory measures already taken or planned by US trading partners have increased uncertainty immensely. As a result, global economic growth could decline significantly.
Bimco warns of a sustained trend towards permanently low or even further falling rates. This is because the capacity of the container shipping fleet is expected to grow by 5.4% in 2025. If trade volumes decline and ships return to their normal routes through the Red Sea, even the lows of 2019 could come back into view, says Rasmussen.
