What moves ocean freight rates

Ocean freight rates are set by three forces, capacity, demand and disruption, and this site tracks none of them as a price. That is the honest starting point. The Dwell reports container volumes and port congestion, not what a carrier charges to move a box. Those volumes are context around rates, an input, not the rate itself. With that clear, here is the framework for why rates rise and fall.

Capacity: how much space is offered

Capacity is the supply of vessel slots on a trade lane. Carriers add it by ordering new ships and deploying bigger ones, and they pull it back by idling vessels or cancelling sailings when demand sags. When there are more slots than boxes to fill them, rates soften. When capacity is tight, rates firm. The global fleet has been growing, which puts long-run downward pressure on rates, but capacity on any given lane can tighten fast when ships get pulled elsewhere.

Demand: how much cargo is chasing it

Demand is the volume of freight wanting to move. It rises and falls with consumer spending, retail inventory cycles and the seasonal push of peak season. When importers rush cargo ahead of a deadline or a holiday, demand spikes and rates jump. When they have overstocked and pause buying, demand drops and rates follow it down. This is the force the volume data on this site speaks to, because loaded imports are a demand read.

Disruption: when the routes break

Disruption is the wild card, and recent years have had plenty. Conflict in the Red Sea has pushed carriers to reroute around the southern tip of Africa, a far longer voyage that soaks up ships and effectively shrinks capacity on the affected lanes. Draft limits at the Panama Canal in a dry year do the same on other routes. A longer voyage ties up more vessels to move the same cargo, which tightens the effective supply of ships and lifts rates even when demand is flat.

Where volume fits

The chart above is import volume, one of the three forces and the only one this site measures. Read it as the demand leg of the rate story, not as a rate. High and rising loaded imports point to firm cargo demand, which is one reason rates might be strong, but the capacity and disruption legs can pull the other way at the same time. That is exactly why this site does not publish a rate. The number would require a spot-rate feed it does not carry, and volume alone cannot stand in for it.

The Dwell explains the framework behind ocean freight rates and reports the volume and congestion around them. It does not track spot rates, carries no rate feed and does not forecast where rates go. For the volume read itself, see the Port of Los Angeles TEU.