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Are freight rates starting to fall? Many shipping companies have reduced freight rates...

Samira Samira 2024-07-09 11:16:25

Sunny Worldwide LogisticsIt is a logistics company with more than 20 years of transportation experience, specializing in Europe, the United States, Canada, Australia, Southeast Asia and other markets. It is more of a cargo owner than a cargo owner~

The latest Shanghai Containerized Export Freight Index (SCFI) was released on the 5th. The index has maintained an upward trend for the 13th consecutive week, but the increase has slowed down significantly. This week it rose slightly to 3733.8 points, an increase of 19.48 points from last week, and an increase of only 0.52%..


It is worth noting that the European route has experienced a correction, ending the previous nine consecutive weeks of upward trend. The market is focusing on whether the freight rate of the European route has reached a peak. At the same time, freight rates on the Persian Gulf, West Africa and South Africa routes have experienced significant declines.


Although the overall trend has adjusted,However, the performance of the US East route is still strong.Freight rates for 40-foot containers (FEU) are approaching the ,000 mark, setting a new high since late June 2022.


Many companies lower freight rates between the US and the West


On the U.S. Line: As freight rates continue to rise and new ships are successively put on the market, freight rates in the shipping market are beginning to show signs of loosening as expected by the industry.


In response to this change, industry giant Mediterranean Shipping Company issued a notice to customers on the evening of the 4th, announcing that it would extend the current freight rate until the end of this month, that is, every 40 feet originally planned to be implemented on the US West and US East routes on July 15. The plan to increase container freight rates by US,000 has been withdrawn.


At the same time, South Korea's SM LINE also informed customers that the freight rate per FEU on the US-West route will be reduced from US,100 to US,500 with immediate effect.


During June, many shipping companies took active measures in response to market changes and demand growth. Mediterranean Shipping Company resumed the MUSTANG route from Asia to the West United States; Singapore SeaLeady launched a fast route connecting China and South Korea to Long Beach in the West United States in mid-June; COSCO Shipping Lines was not far behind and launched a cross-border e-mail service on June 24. The SEA3 West-West Express Line is designed to optimize business needs. This route operates with 6 container ships that can carry 8533TEU, passing through Kaohsiung, Xiamen, Yantian and Long Beach Port.


In addition, Dexiang Shipping has also decided to return to the US-Western market. It plans to operate overtime ships in July and officially join SeaLeady's US-West Express in August, further consolidating its market position through a joint venture model of jointly dispatching ships.


Many freight forwarding companies pointed out that less than a week after the price increase plan was implemented on July 1, many shipping companies such as Sunro Merchant Lines lowered freight rates on the US West Line. The main reason was that overtime ships and new routes emerged one after another. Yang Ming Marine US The price increase of the East China Sea freight rate has been halved, rising by only US,000. It remains to be seen whether other shipping companies will follow suit.


On the European route: France's CMA CGM seized the opportunity of the peak season in the third quarter and deployed seven medium-sized container ships of approximately 7,000 TEU to open a temporary route between Asia and Europe.


The route originates from Asia and passes through the ports of Le Havre and Antwerp in Northern Europe, as well as key ports such as Forth and Malta in the Mediterranean.


The maiden voyage is a 6,350 TEU container ship that successfully sailed from Yantian Port in China on June 30. It is expected that this route service will continue until the end of September.


According to Peter Sand, chief analyst of Xeneta, a Norwegian freight information platform, Europe's current GDP growth rate is 0.5%, which does not match the "dramatic growth in freight volumes."


At the same time, industry insiders in the freight forwarding industry said that affected by the tense situation in the Red Sea region of the Middle East, European importers have generally advanced their purchase plans, and frequent strikes in France and Germany have further disrupted shipping order.


Despite this, the industry generally believes that current demand has not truly reached a strong level,Therefore, it is expected that freight rates may fall back at any time.