East Coast U.S. freight rates surpass $10,000! The SCFI has risen for five consecutive weeks, hitting a nearly 25-month high, and the severe capacity crunch is unlikely to ease in the short term.

Recently, the Shanghai Shipping Exchange released the latest edition of the Shanghai Containerized Freight Index (SCFI), which closed at 3,509.53 points, up 2.9% week-on-week. This marks the fifth consecutive weekly increase, pushing the index to a new high in nearly 25 months. The current round of rate hikes is being driven by a confluence of factors: widespread vessel delays at Asian ports due to typhoons, ongoing capacity constraints in the Panama Canal, tight space availability on East Coast U.S. routes, and the combined boost from peak-season demand—each contributing strong upward pressure on freight rates.

U.S. East Coast crude oil prices have broken the $10,000-per‑barrel mark, while restrictions on the Panama Canal continue to tighten.
         The North American market has been particularly strong. On August 28, the spot rate from Shanghai to major West Coast U.S. ports rose to USD 6,940 per FEU, up 2.6% from the previous period; meanwhile, the rate to major East Coast U.S. ports climbed to USD 10,046 per FEU, a 3.6% increase from the prior period—marking the first time since 2022 that rates have surpassed the USD 10,000 threshold.

         The U.S. East Coast route continues to be significantly impacted by low water levels and capacity adjustments at the Panama Canal. Starting September 3, the daily number of vessels transiting the canal has been reduced from 36 to 34, with a further cut to 32 vessels on September 15. The maximum draft for Neopanamax locks has already been limited to 48 feet and will be tightened to 47.5 feet beginning October 1. As vessel transit efficiency continues to decline and available capacity remains tight, this is providing strong support for East Coast freight rates. According to the WCI index, although spot rates on the Shanghai–New York route have edged down 2% from last week to $9,333 per FEU, they remain at elevated levels overall.

European routes continue to trend downward, while South American routes lead the way, with near‑ocean routes following suit.
         European routes continue to trend downward. At Shanghai Port, the spot rate to major European ports stands at USD 2,716 per TEU, down 4.4% from the previous period; to major Mediterranean ports, the rate is USD 3,557 per TEU, a 5.6% decline from the prior period. Although the Cape of Good Hope route remains the dominant choice, some carriers have gradually resumed transiting the Suez Canal, and with additional capacity continuing to enter the market, supply‑demand dynamics on these routes are easing. According to WCI data, rates on the Shanghai–Rotterdam and Shanghai–Genoa services fell by 3% and 2%, respectively, to USD 4,287 and USD 4,866 per FEU.

         Demand on South American routes remains robust, with rates at USD 8,663 per TEU—up 11.0% from the previous period, the largest increase among major trade lanes. On Australia–New Zealand services, freight rates continued to climb to USD 2,471 per TEU, a weekly rise of 6.7%. In short‑haul routes, driven by peak‑season demand and disruptions from typhoons, rates rose across several key trades: Shanghai–Southeast Asia basic port rates increased by USD 68 to USD 796 per TEU; Shanghai–Korea basic port rates gained USD 20 to USD 232 per TEU; Shanghai–Japan Kanto basic port rates edged up by USD 11 to USD 334 per TEU; and Shanghai–Japan Kansai basic port rates held steady at USD 319 per TEU.

With freight rates remaining at high levels, shippers are advised to secure space in advance to mitigate volatility.
         From a global perspective, the Drewry World Container Index recently stood at USD 4,473 per FEU, down slightly by 1% from last week, weighed down by declines in rates on Asia–Europe and U.S. East Coast routes. Drewry notes that the east–west container shipping market continues to grapple with multiple operational challenges, as port congestion in Asia and low water levels on the Rhine River persist in disrupting global supply chains.

         Against the backdrop of persistently high freight rates and overall tight capacity, shippers should secure space as early as possible on particularly constrained routes—such as those to the U.S. East Coast and South America—to mitigate cost and time‑sensitive risks arising from market volatility. We recommend that shippers closely monitor freight rate trends, proactively check the latest vessel schedules, and develop well‑planned cargo‑transportation strategies. Prioritize confirming booking availability and sailing dates with carriers or logistics providers to minimize the impact of unforeseen disruptions on the supply chain.