Source: Drewry Shipping Consultants. Note: Rates are for full container loads and include the base ocean shipping rate across ship classes, port charges both at origin and at the destination, fuel surcharges and all other surcharges.
The rates to ship a 40-foot container (the most common containerized unit) between different maritime facades are a function of several factors:
- Port charges. Larger and more productive port terminals tend to have lower rates, attracting port calls.
- Distance. A simple function of the amount of bunker fuel consumed since fuel accounts for about 50% of the operating costs of a containership. Longer distances tend to have higher rates.
- Economies of scale. The larger the volume between port pairs, the larger the ships that can be employed to service them, which reduces operating costs. Larger volumes are also subject to more competition, which holds down rates. The limits to economies of scale are related to the nautical profile of the concerned ports.
- Imbalances. Trade imbalances tend to increase the rates for inbound flows and depress them for outbound flows, assuming that the inbound flows are related to a country having a negative trade balance. More cargo is competing for the containership cargo slots. The higher inbound rates subsidize the repositioning of empty containers. On the above map, the rates between Asia and North America, Europe and North America, and Asia and Europe are illustrative of these imbalances.
Significant imbalances in containerized maritime freight rates have emerged along major trading routes. Before 1998, the “spread” between eastbound and westbound rates used to be relatively narrow, a couple of hundred USD per TEU. From 1999, the rate spread increased to about a thousand USD per TEU, reflecting the substantial global trade imbalances. On the one hand, the Asian financial crisis of 1997 created a substantial devaluation of their respective currencies (with the exception of the Chinese Yuan, which was pegged to the USD until 2005), which made exports cheaper. On the other hand, the same period was characterized by significant economic growth in North America with its associated consumption and a level of deindustrialization. American containerized imports thus increased at a rate that was significantly faster than exports.