Shipping rates continue their decline

Overseas shippers of scrap metals, paper and other secondary commodities shipped in containers are seeing rates that continue on a downward slope this year, as measured by a global composite index.

The global container shipping rate index compiled by United Kingdom-based Drewry showed a 5 percent decline in average rates in the week ending Sept. 1.

A writeup on the latest index by the Greece-based Hellenic Shipping News indicates the latest rate drop marks “the 27th consecutive weekly decrease” for an index figure that has “dropped by 43 percent when compared with the same week last year.”

The Drewry World Container Index (WCI) is now $5,662 per 40-foot container. That is down 45 percent from a recent peak of $10,377 reached in September of last year.

Rising rates and widespread service complaints in the first two years of this decade prompted shippers in the United States to lobby federal agencies and the United States Congress fiercely for investigations and relief. The effort culminated this April in President Joe Biden signing the Ocean Shipping Reform Act.

Recycling was among the industry sectors expressing frustration with shipping conditions in the past two years, with the Washington-based Institute of Scrap Recycling Industries (ISRI) forwarding its concerns to agencies and legislators.

While the lower rates of August 2022 are certainly being welcomed by recyclers, Hellenic Shipping News notes that trans-oceanic shipping remains costly compared with earlier years. The Drewry WCI, it writes, “remains 55 percent higher than the 5-year average of $3,664.”

Although recyclers make far fewer shipments to China than they did five years ago, Drewry lists the Los Angeles-to-Shanghai route as its only U.S.-to-Asia benchmark route. That route remains relatively affordable, in the most recent week coming in at a $1,262 average cost, compared with $5,562 for a 40-foot container traveling in the opposite direction.