International container ship freight rates fell 40% from the end of 2024

Container ship freight rates are falling at an accelerated rate. International indicators fell 40% from the end of 2024. Not only have signs of ship shortages weakened, but the effect of the surprise transportation of tariffs initiated by the Trump administration has also stabilized. At present, the focus of relevant people has turned to the impact of tariff games among countries on cargo transportation.

Data from the Shanghai Shipping Exchange show that the Shanghai Export Container Freight Index (SCFI), an indicator of international container ship freight rates, has fallen for eight consecutive weeks as of recently, falling to 1436.3 on March 7. It is 42% lower than the end of 2024.

From Shanghai to the West Coast of the United States, one of the main routes, as of March 7, the freight rate for each 40-foot container was US$2,291, falling to the lowest level since December 2023. It was around US$4,600 at the end of 2024 and has almost fallen by half in the nine weeks since the beginning of 2025. Freight to the East Coast of the United States is $3,329, down 45% from the end of 2024. Freight to Europe also continues to decline.

Container ship freight rates soared from the end of 2023 to the summer of 2024. The reason is that as the situation in the Middle East becomes tense, large shipping companies began to avoid the Red Sea and the Suez Canal, which are the key points between Asia and Europe, and detoured to the Cape of Good Hope at the southern tip of the African continent. The number of days required for round trips increased, coupled with increased cargo volume, resulting in insufficient number of ships to meet transportation demand.

On the other hand, there is a view that the container ship market will supply a large number of new ships from 2023 to 2025. Due to the sharp increase in ship freight rates caused by the logistics chaos under the new crown epidemic, new orders for ships have continued to increase, and most of the ships ordered at that time will be completed.

According to data from NYK, the growth rate of space in 2024 exceeded 10% year-on-year, and it is expected to increase by 5% in 2025. The sense of ship shortage is easing, which has led to a decline in freight rates.

The expectation of a decrease in cargo transportation volume is also the background for the decline in freight rates. Data from the Japan Maritime Center (located in Chiyoda Ward, Tokyo) showed that the volume of shipments from Asia to the United States in January hit a record high for the same month. Takuma Matsuda, a professor at Takushoku University in Japan who is familiar with the shipping market, pointed out that “this includes emergency imports from Asia to increase US inventory due to concerns about US tariffs.”

From the fall of 2024 to the beginning of 2025, with the impact of the US port strike, the demand for surprise transportation has become an important factor in pushing up freight rates.

However, some believe that this trend of surprise transportation has slowed down after the long Chinese New Year holiday. The head of a large container shipping company said, “After the Spring Festival, China’s freight was not as strong as expected.” Professor Matsuda of Takushoku University in Japan believes that “although it is difficult to imagine that freight is decreasing sharply, it does not seem to be strong enough to push up freight rates.”

If container ship freight rates continue to fall, they may soon fall back to the level before the detour from the Red Sea route to the Cape of Good Hope. Whether container shipping companies adjust the supply of space to support freight rates will become the focus.

The impact of the US tariff policy and other countries’ countermeasures on cargo transportation will also affect freight rates. The shipping industry is also becoming more vigilant about the decline in personal consumption in the United States. Gentaro Hara, acting head of the research department of NYK, said, “We should not only pay attention to the impact of departures from China, but also to the impact on emerging market countries such as Vietnam, whose economy is highly dependent on the United States.”