China’s Golden Week set to push container rates down

Container rates are falling on the Asia-Europe trade as capacity increases, while rates across the Pacific are currently rising. Freight rates are expected to fall next week ahead of China’s Golden Week in early October. Meanwhile, the US might keep additional port fees on China-built vessels on hold.The Drewry World Container Index fell by 1%, driven by lower rates on the Asia-Europe trade route. On the Asia–Europe trade, rates from Shanghai dropped by 5% to Genoa and by 4% to Rotterdam. More Suez Canal transits have increased capacity on the Asia-Europe route, and Drewry expects rates to fall further next week.On the Transpacific route, rates from Shanghai to Los Angeles rose by 2%, while rates to New York were unchanged. Drewry expects rates to fall next week in the run-up to the Golden Week holiday, despite carriers reducing capacity.China’s Golden Week is a week-long holiday around National Day on 1 October. Many factories and businesses close or reduce operations during this period, temporarily lowering production and export volumes. Container demand therefore tends to weaken around the holiday, prompting shipping lines to reduce capacity through blank sailings. If relatively high shipping capacity remains available despite these measures, container rates can fall.US port fees on holdUS President Donald Trump will host Chinese President Xi Jinping for a two-day state visit starting on Wednesday. Bloomberg reports that the US is expected to delay new tariffs on Chinese goods until after the visit. Freightos reports that Washington may extend the current trade truce with China by three to six months, which would also keep additional US port fees on China-linked vessels on hold.