Sharp swings in container freight rates are likely to continue this quarter as shipping companies struggle to gauge demand amid an uneven global recovery from the coronavirus.
The cost to ship containers slumped earlier this year as the pandemic pummeled demand, with rates bottoming out in late April. They rebounded steadily with economic activity through May but then jumped 20% last month, according to the Drewry World Container Index, as A.P. Moller-Maersk A/S and other shippers removed capacity from the market.
Shanghai to Los Angeles route prices spiked by 47% in June as China’s rapid economic recovery from the outbreak took the shippers by surprise. The companies over-estimated the amount of blank sailings — when vessels have container slots that aren’t filled — needed and are likely to respond with more supply this quarter. The industry is beginning to see the un-blanking of some Trans-Pacific voyages as lines correct their previous errors, and it is anticipated that capacity-discipline will soften as the risk level recedes and cargoes come back.