Freight rates up 11% in two weeks over Christmas and New Year rush

With an increased festival rush over New Year, freight rates across the world’s eight major trade routes by sea spiked nearly 11 per cent in the two weeks to 2025, shows the data from maritime research firm Drewry.

 

The World Container Index rose 8 per cent to $3,803 for a 40-foot container on December 19 and then another 3 per cent to $3,905 on January 2, signalling continuation of volatility in the international container trade.

 

Freight rates have gone in ebb and flow over the past two months after a big spike in the first half of 2024, where container rates quadrupled over the year to $6,000 a container, and then went in free fall till October ($3,095).

 

“In recent months, factors such as inflation and potential recessions in various economies have compelled companies to make strategic decisions regarding inventory management, sourcing, and logistics, which directly influence demand for container shipping. The ongoing geopolitical tensions and trade wars involving major economies have created uncertainty and volatility in global trade flows,” Pushpank Kaushik, chief executive officer (CEO) and head of business development (Subcontinent, Middle East, and South East Asia), Jassper Shipping, told Business Standard.

 

Freight rates from China to the United States (US) West Coast increased 7 per cent or $330 to $4,829 per 40-foot container, the index showed. The firm expects rates in Trans-Pacific trade to rise this week, driven by front-loading ahead of the looming US port strike this month and the anticipated tariff hikes under the incoming Trump Administration.

 

Global volatility has impacted container trading rates for Indian ports as well, with two of the three large container ports showing rate spikes between December and January (see chart).

 

“The average prices for 40-foot high-cube containers (cargo-worthy) have risen year over year at least by 34 per cent across the three major ports — Mundra, Chennai and Nhava Sheva. Mundra witnessed a 52 per cent spike from January 2024 to January 2025, while Chennai registered a 36 per cent hike and Nhava Sheva registered a 34 per cent spike,” Christian Roeloffs, cofounder and CEO of Container xChange, a container-trading platform, told Business Standard.

 

Last year container prices saw significant increases during two key periods. The first surge occurred in June and July, driven by the peak shipping-season rush. The second increase happened in November, influenced by typical seasonal restocking and the impact of the US elections, when President-elect Donald Trump sent the shipping industry into frenzy with new tariff announcements

 

Moreover, shippers are facing increasing costs due to higher freight rates and supply-chain disruption. Port congestion is also a significant challenge, with delays in vessel turnaround times and cargo handling, said Kaushik.

 

Experts say the market continues to grapple with excess capacity across shipping routes, which limits the potential for sustained rate increases in the medium term.

 

The Red Sea still continues to be fraught with geopolitical challenges, and is not being used by merchant vessels, forcing a detour around Africa, according to domestic and international maritime watchers. This detour results in higher transportation costs and a delay of 12-14 days.

 

The global container crisis had reached its peak earlier this year, so much so that the government had to intervene for some relief measures for traders hit by the volatility.

 

Shipping Corporation of India is chartering vessels from Europe, and is also going to buy five second-hand vessels, aged around 10 years, to handle container volatility.