Container Shipping Rates Fall to a Record Low

A container ship arrives at the port of Qingdao, in northeast China's Liaoning province on Jan. 20, 2014. Baltic Dry Index that measures cost of hiring ships rose nearly 50 percent in November. STR/AFP/Getty Images

The global shipping industry continues to suffer from China’s weakening economy and excess shipbuilding capacity. Freight rates hit all-time lows last week. 

Spot container freight rates collapsed by 62 percent in the past year, according to a London-based advisory firm Drewery which compiles the World Container Index (WCI).

The index tracks the spot freight rates on 11 global routes connecting Asia, Europe, and the United States. It reached a record low of US$701 per 40-foot container on March 10.

“This was the lowest reading since the World Container Index started tracking weekly transatlantic, transpacific and Asia-Europe rates in June 2011,” stated Drewery in its research report.

The index is now 60 percent lower than its average of the past 5 years. The worst hit lines were the Shanghai-Rotterdam and the Shanghai-Genoa routes. Both fell to all-time lows.

Container freight rates fell to a record low on Shanghai-Rotterdam route on March 10, 2016. It is one of the worst hit lines. World Container Index