Drewry WCI Jumps 5% to $4,166, Reaching 22-Month High

The Analysis

Drewry put the World Container Index composite at 4,166 dollars per 40ft container on 25 June, up 5 percent on the week, and the release calls it the highest reading since September 2024, which is a 22-month high by this card. Shanghai to Los Angeles went up 12 percent to 5,750. Shanghai to New York went up 6 percent to 7,149 per FEU. Asia-Europe held stable. Those are the market numbers, and every one of them has already been overtaken by a date.

Because the same release carries one more sentence that outranks all of them: carriers have announced further peak season surcharges and further Freight All Kinds increases effective 1 July. Every figure above describes shipments made under the terms that applied when they were collected. Any box whose sailing crosses 1 July takes whatever those filings say, and nobody has put those amounts in front of you yet. That is the whole job this week: turn announced noise into a written number on your own cost sheet before the effective date arrives, rather than discovering it on an invoice in three weeks.

The trap here is easy to fall into and everybody falls into it at least once. You read 4,166, you react to 4,166, and you carry that reaction into decisions about money that was never priced at 4,166. The index is a thermometer reading taken on a Thursday. Your cost sheet is the thing your margin actually lives on. This piece is about building the second one properly and keeping it updated, so that next Thursday's number lands on a table rather than on a mood.

Start by separating the two kinds of information in that release, because they behave differently. The composite and the two lane readings are observations: this is where the market stood for spot business in the week ending 25 June. The 1 July filings are obligations: if your boxes move after that date, somebody will try to charge you. Observations are informative and nobody can bill you for them. The obligations are the part that reaches your cash, and at the moment you have almost certainly been told less about them than about the index.

Back out the prior week first, because the percentages on this release do not tell the same story as the dollars do. If 4,166 is 5 percent above the week before, the prior week composite stood near 3,968, so seven days added about 198 dollars to the basket. If 5,750 is 12 percent up, Shanghai-Los Angeles had been near 5,134, which means about 616 dollars on that lane. If 7,149 is 6 percent up, Shanghai-New York had been near 6,744, about 405 dollars on that lane. Those three prior-week figures are my arithmetic rather than published numbers; write them down labelled as arithmetic. Now compare the three increments: 198 on the basket, 616 on Los Angeles, 405 on New York. The lane carries more than three times the basket move, which means the basket is being held down by corridors you may not ship on.

So a five percent headline is not a five percent week for you. If your book is transpacific west coast, your week was 12 percent and 616 dollars a box, and any internal note that goes out saying the market only moved five is a note that will misinform everybody reading it. This is the single cheapest habit available to you and it takes about ninety seconds a week: take the percentage your lane moved, convert it back into the prior-week level, then subtract to get the dollar move. Publish the dollar move rather than the percentage. Sales can price against a dollar move. Nobody has ever successfully priced anything against a percentage.

Europe deserves a sentence of its own, precisely because it did nothing. Asia-Europe rates held stable in this release while the transpacific lanes moved. If your book leans European it would be comforting to conclude that the week cost you nothing, and that conclusion is wrong for reasons that have nothing to do with the assessment. Stable means the assessment did not move between two Thursdays. It says nothing about the 1 July filings, which is exactly why you cannot take comfort from it. Split your cost sheet by trade lane and ask each carrier what changes on each lane from 1 July, then record the answer per lane rather than per relationship.

Now the 22-month framing, which is doing a lot of work in the headline. The reading is the highest since September 2024, and that sentence is useful for one specific purpose: it tells you any internal plan built on a quieter part of the cycle is now describing a market that no longer exists. Quantify rather than feel about it. Take the lane level you used when you built your quarterly or annual assumption, compute the distance to today's published reading, then multiply that distance by your box count. Assume your east coast plan carried 6,000 dollars a box against the Shanghai-New York corridor: today's reading of 7,149 is 1,149 above that, which is 19.2 percent, and on 30 boxes a quarter that is 34,470 dollars of assumption that simply expired.

If your plan carried the same rate across every lane, run the exercise per lane and prepare for an uneven answer. Do not carry a single assumed rate for all trade lanes into next quarter just because that is how the template is built. The published readings already disagree with each other by more than they disagree with any historical number you have filed: Los Angeles at 5,750 and New York at 7,149 this week are 1,399 dollars apart on the same ocean, on the same day, out of the same origin country. A single blended lane rate cannot describe that, and any plan built on one will be wrong on both lanes.

That 1,399 is the most immediately useful number in the release, so let us use it. The all-water service into New York costs 1,399 dollars more per FEU than landing at Los Angeles this week, which is New York running 24.3 percent above Los Angeles. The natural question is whether the extra ocean cost buys you something on the inland side. Set it up as a break-even rather than an argument. The 1,399 dollars is what you pay to avoid moving the box inland from Los Angeles. So your west coast routing stays the cheaper option for exactly as long as your inland cost from Los Angeles to final destination, plus your own valuation of whatever time difference exists between the routings, sits below 1,399. Assume your inland cost from Los Angeles to your own destination is 1,150 dollars a box. On this week's readings the west coast routing wins by 249 dollars before anyone says anything about schedule.

Put your own inland number where I put 1,150, because the arithmetic is worthless with somebody else's input. If it comes in under 1,399 the Los Angeles routing costs less on paper this week and the discussion moves to reliability and to whatever your receivers can physically accept. If it comes in above 1,399, and if New York receivers can take the volume, the east coast routing is cheaper on published numbers alone, and you should say that in writing to whoever owns the decision, along with the two contributing figures so they can see the derivation rather than take your word for it. Either way the decision now rests on two numbers you can update weekly instead of a preference someone formed years ago.

Convert those lane numbers into units before they reach anybody who sets prices, because resale margin is made per carton and lost per carton. Assume your goods load 1,000 cartons to a 40 foot box. Shanghai-Los Angeles at 5,750 is 5.75 dollars of assessment freight per carton, up 0.62 dollars from the derived prior-week level of 5,134. Shanghai-New York at 7,149 is 7.15 dollars a carton, up 0.41 dollars on the week. Now check what your own customer agreements say about those unit figures. If the contract carries a freight adjustment clause, find the index it points at, the lag before it bites and the threshold that triggers it, because a clause that only fires every quarter leaves you funding six weeks of a move like this one out of margin. If there is no clause at all, then all of it stays on you, and the conversation with the customer happens this week rather than after three invoices have already gone out at the old number.

Check the whole thing against your own invoices before you believe either side. Pull the last three invoices on each lane, divide the all-in total by the number of boxes, and write down what you actually paid per box. Compare that with the level you thought you had, then write down the drift. This takes twenty minutes and it regularly produces numbers that neither the index nor your own table explains, usually in local charges rather than in base freight, and those are the charges nobody is watching while everybody watches the assessement.

The mechanics of getting anything like this onto your own cost sheet are boring and they are most of the value. Build one table with five columns and keep it in one file that one named person owns: trade lane and box size, all-in ocean rate including every surcharge currently known, the source of each component, the effective date of that component, and the date you last verified it. One row per carrier per lane per box size. Update it every Thursday when the index lands, or Friday morning at the latest, and circulate it to whoever quotes customers before they quote.

Any row whose verification date is more than thirty days old goes amber and nobody quotes off it until it is re-confirmed with the carrier, because a stale row looks exactly like a current row to somebody scanning quickly on a Friday morning. The rule that goes with it is absolute: customer quotes are built off that table, never off an index headline. The composite sits 1,584 below Los Angeles and 2,983 below New York this week, so a headline-based quote is short by those amounts per box.

Then apply the same discipline to what came announced rather than assessed. A peak season surcharge and a Freight All Kinds increase are not the same animal and they do not arrive at your cost in the same way. A FAK movement changes the base line that everything else is measured against, including any percentage-based discount you may have negotiated, so a base-line move quietly changes the value of your own contract terms. A PSS is a layer on top, often time-bounded, sometimes applied per booking rather than per container, sometimes excluded by agreement. Ask your carriers, in writing, three things about each one: the amount, the unit it is charged on, and the date it stops. Those are three questions per carrier per lane and they take one email each.

The effective date itself deserves its own line of enquiry, because announcements almost always leave the trigger event vague and everybody assumes a different one. There are at least four dates attached to any shipment and any of them could be the one a filing keys off: the date you booked, the date the container gated in, the date the vessel sailed, and the date shown on the bill of lading. For a filing effective 1 July, the difference between those four definitions can move a booking either side of the line by several days. Write to each carrier and ask which of them governs your shipment. Do not accept the usual answer of whatever was in the general announcement. If they cannot name the trigger date, they cannot later enforce their own interpretation of it cleanly either, and your written question is your evidence.

Price that ambiguity, because nobody ever does until it has already cost them. Call the announced increase P dollars per container on your lane, whatever your carrier's filing turns out to say, and count how many boxes you have scheduled to cross 1 July inside the first two weeks. If P is small and your count is twelve, the exposure from getting the trigger date wrong is twelve times P. If your forwarder can move those twelve boxes onto a sailing that clearly falls before the line and the cost of doing so is less than twelve times P, do it. If the cost of moving them exceeds twelve times P, leave them where they are and argue afterwards with a written audit trail. Either answer is fine. Guessing without doing this multiplication once is not fine, and it is how most of these arguments get lost.

Capacity is the other half of the release and it is where the softest language sits. Tight meeting front-loaded demand is Drewry's description of why upward pressure should continue, and it is a description rather than a measurement. Do not try to price it directly. Instead turn it into two questions you can get answers to this week. Ask each carrier what share of your June bookings were confirmed at the rate originally quoted, and ask what proportion of your July requests they are prepared to nominate now. Those two numbers are real, they come from your own volume rather than from a general market comment, and they tell you more about your exposure than any index does. If either answer is worse than last month, write that down too, because it will be the first thing you are asked when a customer shipment misses.

Then set a line, the way you would for any other price you cannot control. Los Angeles sits at 5,750. Say your line is 6,000: two consecutive weekly readings above it and you stop adding new spot exposure on that lane and you move the remainder to fixed terms with a named and capped surcharge schedule. Today's headroom to that line is 250 dollars, and this week's own move was 616 dollars. My headroom is four days of this week's pace. That is not a prediction, that is arithmetic, and it is exactly why the line has to exist before it gets hit rather than being invented at the moment somebody panics. New York gets its own line by the same method, at whatever distance above 7,149 represents the same tolerance in your own business.

Watch three things while you do all of this, because they are where good work gets quietly undone. The unit basis first: these readings are per 40ft and per FEU, while some of your contracts are written per TEU, so doubling or halving happens by accident and nobody notices for a month. The scope of a filing second: an announced increase usually names lanes, and the lane list is rarely the whole world, so check whether your destinations are inside it before you absorb the cost into any quote. And the downstream effects third: a rate change moves the value of any quantity commitment, any discount tier and any index-linked resale clause you signed. Ask whoever owns those agreements to re-read them this week with these numbers in front of them, rather than at renewal.

One more thing to guard against, which is specific to a week like this one. When Europe holds stable and the Pacific runs hot, the reflex is to shift everything toward the lane that did not move. That is a real option and the 1,399 divide makes it look attractive. Do the shift on all-in rather than on assessment, because the assessment covers one line of one invoice and nothing about whether your volumes fit the service, whether your receivers can handle the change, or whether your inland network prices the same in another region. If the analysis survives all of that, do it. If it does not survive any of it, it was never cheaper, it just had a smaller headline number.

Give finance three lines and nothing more, because a page will get skimmed and three lines will get read. The composite is at 4,166 and my lanes are at 5,750 and 7,149. My customers are quoted off my own table, which stands at these two figures plus these two surcharge layers, and it is refreshed every Thursday by this named person. My exposure to anything that appears after 1 July is limited to these N boxes, and I expect the first post-effective invoice to be reconciled line by line by 3 July. If you can say those three sentences with real numbers in them, you have done more this week than most of the market manages in a month.

Prices neither know nor care how carefully anybody planned around them. They simply arrive on 1 July like weather, and you will meet them with a written table or with a feeling. Bring the table.

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— By Vivian Zhao