Why Are Shipping ETFs Quietly Outperforming Tech Stocks?

The Drewry World Container Index (WCI) rose 2% to $1,957 per 40ft container, marking the second consecutive weekly increase.

Here's what we know. 

Global shipping routes are fundamentally disrupted, vessel capacity is shrinking, and the companies that own the ships are posting record margins.

Two major chokepoints are reshaping global trade right now.

First, the Red Sea conflict. Attacks on commercial vessels have forced major carriers to reroute around the Cape of Good Hope. 

That adds 10-14 days to Asia-Europe voyages. Longer routes mean fewer available ships. Fewer ships mean higher rates. Simple supply and demand.

Second, the Panama Canal. 

Climate shifts have dropped water levels enough to restrict daily transits. The canal authority cut the number of vessels allowed through each day. Ships that used to move between Asia and the U.S. East Coast in 18 days now face delays or must take alternative routes.

Both problems hit at the same time. That's why rates are climbing.

But freight rates? Those fluctuate based on available capacity.

When rates rise even 20%, profits can double or triple. That's the operating leverage at work. Maersk, ZIM, and other major carriers saw this pattern in 2021-2022. We're seeing it again now.

The Shanghai-Genoa route is up 15% in recent weeks. Shanghai-Los Angeles climbed 8%. 

These aren't marginal moves for companies with billion-dollar fleets.

Two ETFs give direct exposure to this shipping boom.

$BOAT (SonicShares Global Shipping ETF) tracks major container shipping companies. The fund holds the operators benefiting from higher container rates. When the Drewry index moves up, these companies typically see immediate margin expansion.

$BDRY (Breakwave Dry Bulk Shipping ETF) focuses on bulk carriers. Think iron ore, coal, grain. The Baltic Dry Index sits at 2,845 points right now. That's elevated. Historical context: below 1,000 signals weak demand, above 4,000 indicates extreme tightness. We're in the upper range, driven by Asian manufacturing recovery and infrastructure demand.

Both ETFs move with different dynamics. BOAT responds to consumer goods flow and container economics. BDRY tracks raw material movements and industrial production cycles.

The Drewry index breaking a three-week decline matters. It signals the rate bottom is behind us. More importantly, the Shanghai routes showing the strongest gains tells us where demand pressure is highest.

China's export machine is running. Factories need to move goods. Port congestion in major Asian hubs is building. That creates the perfect condition for sustained rate increases.

The Baltic Dry Index staying above 2,500 confirms the bulk shipping market remains tight. Industrial commodity demand hasn't collapsed despite recession fears earlier this year.

Shipping rates can reverse fast. New vessel deliveries in 2026-2027 could flood the market with capacity. If the Red Sea situation stabilizes, ships return to faster routes. That extra capacity would pressure rates down.

But that's not happening yet. Current order books show limited new capacity hitting the water in the next six months. And geopolitical tensions rarely resolve quickly.

Financial professionals should watch weekly Drewry updates and monthly Baltic data. These indices lead carrier earnings by 4-6 weeks.

$BOAT and $BDRY provide liquid exposure without picking individual shipping stocks. 

The question isn't whether rates will stay elevated. It's how long the bottlenecks persist. Right now, the data points to continued tightness through Q1 2026 at minimum.

That makes the shipping trade one of the clearer supply-demand imbalances in public markets today.

Disclaimer: This is not financial or investment advice. Do your own research and consult a qualified financial advisor before investing.