Dive Brief:

• Ocean freight rates from China to both U.S. coasts continued to fall rapidly throughout October, approaching pre-Hanjin levels, according to data from the Freightos International Freight Index (FIFI). 
• Transpacific rates fell 2.61% to an average of $1,442.33 per TEU from September's average of $1,481. Rates from China to the East Coast fell more drastically by 11.03% to $2,035 per TEU, down from #2,287 in September.
• The year-over-year comparison is most striking. Transpacific rates fell by 19.22% from their 2016 levels, while China to U.S. East Coast rates fell 18.42%.

Dive Insight:

Spot market rates ebb and flow constantly, but the recent declines in the ocean industry show something deeper is going on within the industry.

FIFI data shows rates have been volatile since Hanjin Shipping's bankruptcy unveiled the shipping industry's instability. The months that followed saw record scrapping, a wave of consolidation, new shipping alliances and a string of new orders simultaneously affecting the market. While old rules of seasonality still applied, they were far less predictable due to the consistent shifts in supply and demand.

That, and, an extremely competitive market. Shippers may celebrate a return to normal, with rates once again nearing the $2,000 mark for shipping to the U.S. East Coast, and the $1,400 mark to the West Coast. However, they should note that "normal" also means capacity instability in the shipping industry.

It once seemed as though lessons of past overcapacity would not be taken for granted in the industry. Now, doubt is once more on the horizon. Or, as Drewry Shipping Consultants said in its most recent Container Insight Weekly, the industry finds itself in a "precarious condition," although "for now the future looks bright."