CN Index signals high pressure despite softer freight rates
CN Index Remains High Amidst Easing Freight Rates and Persistent Risks
The CN Index registered 561 this week, signaling that the global container shipping market continues to experience high pressure. While this figure represents a modest easing from the previous week, it underscores the ongoing market stress driven by a combination of softer freight rates on key trade lanes and persistent geopolitical and operational risks.
Freight Rates Show Signs of Softening
Freight pricing across major East-West trade corridors has declined week-on-week, offering some, albeit limited, relief to shippers. Rates on the Asia–USEC and Asia–USWC routes have decreased, suggesting a marginal improvement in capacity availability and weaker short-term demand. Despite this trend, pricing on these routes remains significantly above historical averages, indicating that structural capacity tightness has not fully abated.
Similarly, the Far East–North Europe corridor has seen a reduction in freight rates, further supporting the notion that pressure on the Asia–Europe trade is gradually subsiding. However, freight levels continue to be elevated compared to long-term norms, and carriers are maintaining disciplined capacity management. On the trans-Atlantic westbound route, rate movements are more varied, reflecting mixed demand dynamics across secondary intercontinental trades.
Regional markets have broadly mirrored this softer trend. Intra-Asia pricing has edged lower, while routes serving the Mediterranean and Persian Gulf remain under moderate pressure. Lower-volume regional trades, including those connecting to Africa and Australasia, continue to operate at subdued levels, though costs still exceed pre-disruption benchmarks.
The overall market component of the CN Index has decreased this week, primarily due to incremental rate reductions across multiple routes rather than a sharp decline in any single trade lane.
Geopolitical Risks Continue to Set a Floor
Geopolitical and operational risks remain largely unchanged and continue to establish a structural floor for the index. The Red Sea continues to be the most significant source of risk, with ongoing security concerns influencing routing decisions and cost structures. Trade and sanctions-related constraints also remain elevated, complicating compliance and operational planning.
Moderate risk levels persist in the Black Sea, Gulf of Guinea, and Gulf of Aden. Meanwhile, major chokepoints such as the Panama Canal and Suez Canal are operating normally.
CN Index Interpretation
A CN Index reading of 561 indicates that while global container shipping pressure is easing, the market is far from normalized. Freight rates are softening, but capacity discipline and geopolitical risks are preventing a significant downturn. The index suggests a market transitioning away from peak stress, though it still necessitates careful planning and ongoing risk management.