Ten consecutive declines! Line freight prices plummet, U.S. West freight rates will fall to "more than 3,000" in November?
Add time：2022-08-26 Click：977
Ten consecutive declines! Line freight prices plummet, U.S. West freight rates will fall to "more than 3,000" in November?
Although the container shipping industry is entering the traditional peak season, but container prices and now freight prices are still down sharply year-on-year.
Meanwhile, Alan Murphy, CEO of maritime data analytics company Sea-Intelligence, analyzed that ship utilization continues to remain low and freight rates will remain on a downward trend.
Container freight rates continue to fall
According to the latest data of Shanghai Shipping Exchange, Shanghai Export Container Freight Index (SCFI) dropped 132.84 points to 3429.83 points, down 3.73%, falling for ten weeks to the low since mid-May last year.
The four main routes all went down, including the U.S. West line plunged for two consecutive weeks and continued to expand the decline.
The latest issue of major routes continue to decline across the board.
*Far East to the U.S. West at $5,782/FEU, down $371, or 6.03%.
*Far East to the U.S. East at $8992/FEU, down $114, or 1.25%.
*Far East to Europe at $4788/TEU, down $183, or 3.68%.
*Far East to Mediterranean freight rate of $ 5488 / TEU, down $ 150 per week, down 2.66%.
*South-East Asia, at $749/TEU, down $26, or 3.35%.
*Persian Gulf services, the rate of 2231 U.S. dollars / TEU, down 5.9% compared with the previous period.
*Australia and New Zealand services, the price of 2853 U.S. dollars / TEU, down 1.7% compared with the previous period.
*The South America route fell for 4 consecutive weeks, with a rate of $8965/TEU, down $249, or 2.69%.
Among them, last week, the U.S. West line and Europe line fell more, weekly decline of 6.03% and 3.68% respectively. Far East to South America and Asia interline also fell across the board.
Industry sources pointed out that the North American line down increased, the global container ship short atmosphere turned thick. Among them, the U.S. West line due to the previous fear of strikes, the volume of cargo to other ports, and the recent peak season is not prosperous cargo volume fell sharply, so it became the four major routes in the biggest drop in freight prices in the hardest hit.
At the same time, Deloitte World Containerized Freight Index (WCI) has been declining for 25 consecutive weeks, the latest offer on August 18 fell to 6224 points, down 3% per week, Shanghai to Rotterdam, Los Angeles are down 5%, only Shanghai to New York rates are flat, but whether this is a signal to stop falling remains to be seen.
In addition, the latest Ningbo Export Container Freight Index (NCFI) released by Ningbo Shipping Exchange closed at 2588.1 points, down 6.8% from last week. 3 out of 21 routes saw a rise in the NCFI, while 18 routes saw a fall in the NCFI. Among the major ports along the "Maritime Silk Road", all 16 ports saw a drop in the price index.
*European routes: European routes Tariff index of 3342.3 points, down 8.2% compared with last week; East routes Tariff index of 3095.8 points, down 3.1% compared with last week; West routes Tariff index of 3798.6 points, down 6.0% compared with last week.
*North America routes: The freight index of U.S. East routes was 3078.3 points, down 2.3% from last week; the freight index of U.S. West routes was 3119.3 points, down 7.5% from last week.
*Middle East: The freight index was 1422.4 points, down 21.9% from last week.
*Thailand-Vietnam: The freight index was 385.7 points, down 30.2% from last week.
Last year experienced the biggest glory in the history of container shipping, freight rates were soaring and shipping companies were making a lot of money. This year, compared with the year of export shipping rates, that is a world of difference, this year is from the beginning of the year down to the middle of the year, whether it is Southeast Asia, the Middle East, or Europe, America, the world's sea freight prices are rapidly declining.
Among them to Southeast Asia, for example, the recent Southeast Asia route freight prices fell wildly more than, close to the waist, to some ports in Southeast Asia from about $ 300 to a high of 2000-3000, now down to about $ 300.
Southeast Asia shipping rates plummeted may be the reason, inflation led to a decline in consumer purchasing power, freight demand is seriously inadequate, Thailand-Vietnam route space surplus, freight prices continue to fall. The worse the market situation, the more serious the inward roll, the market appeared to grab the goods, kill the competition.
Spot freight rates will maintain a downward trend
It is reported that Craig Fuller, CEO and founder of FreightWaves, recently tweeted a bold prediction - by November, container freight rates from China to the U.S. West Coast will fall to $3900, down more than 80% from the peak of $20,586 a year ago.
Against the backdrop of falling container costs, sea freight data analytics firm Sea-Intelligence reports that the downward trend in demand can be offset by a decline in capacity injections.
"Although demand rose 0.6% year-on-year in June, this does not change the fact that it has been trending downwards since the peak season demand surge in 2020." Sea-Intelligence CEO Alan Murphy said.
The more relevant question, therefore, is how demand growth matches the capacity deployed. And currently, capacity growth is increasing at the same time as demand growth is slowing. For transpacific services, the sharp drop in vessel utilization in May was extended in June as well, with vessel utilization at around 89%.
There is a correlation between vessel utilization and spot rates on the Trans-Pacific, Murphy said, "Basically, once vessel utilization on the Trans-Pacific reaches 90 to 95 percent, which means all capacity is fully utilized, freight rates will now increase significantly."
"Now that we've seen two consecutive months of vessel utilization below 90 percent, it's clear that the market is no longer able to sustain the very high levels of current freight rates."
"Most importantly, average vessel utilization on major trade routes continues to be below the threshold that has driven the record peak vessel utilization over the past 18 months." Murphy noted, "As a result, the downward trend in freight prices will now continue."
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