The freight rate in the US East exceeded 10,000, the freight rate hit a new high in the past 25 months, and the container shipping market is hot again

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Recently, the Shanghai Shipping Exchange released the latest Shanghai Export Container Freight Index (SCFI), which closed at 3509.53 points, a weekly increase of 2.9%. It has risen for five consecutive weeks, hitting a new high in nearly 25 months. This round of freight rate increases has been driven by multiple factors: concentrated ship delays in Asian ports due to typhoons, continued tightening of the Panama Canal's capacity, tight space on the US East Route, and resonance of demand in traditional peak seasons, which together provide strong support for freight rates.

The performance of the North American market is particularly outstanding. On August 28, the freight rate exported from Shanghai Port to the basic port in the US West rose to US$6,940/FEU, an increase of 2.6% from the previous period; the freight rate from the basic port in the East US rose to US$10,046/FEU, an increase of 3.6% from the previous period, breaking through the US$10,000 mark for the first time since 2022.

The US East Route continues to be significantly affected by the low water level and capacity adjustment of the Panama Canal. Since September 3, the number of daily navigation ships in the Panama Canal has been reduced from 36 to 34, and will be further reduced to 32 on September 15; the maximum draft of the New Panamax locks has been limited to 48 feet, and will be further tightened to 47.5 feet from October 1. The efficiency of ship traffic continues to decline and the available shipping space is tight, providing strong support for the freight rates in the East US. The WCI index shows that although the spot freight rate on the Shanghai to New York route has slightly adjusted back 2% from last week to US$9,333/FEU, it is still at a high level overall.

European routes continued their downward trend. The freight rate exported from Shanghai Port to the European basic port market is US$2,716/TEU, down 4.4% from the previous issue; the freight rate to the Mediterranean basic port market is US$3,557/TEU, down 5.6% from the previous issue. Although there is still uncertainty about the situation in the Red Sea, some shipping companies have gradually resumed traffic in the Suez Canal, and continued to add new shipping capacity. The supply and demand relationship between routes has become looser. WCI data shows that the freight rates for the routes from Shanghai to Rotterdam and Genoa fell by 3% and 2% respectively to US$4,287/FEU and US$4,866/FEU.

The Persian Gulf route was continuously affected by the situation in the Middle East, and the freight rate continued to rise, reported at US$6,139/TEU, an increase of 7.1% from the previous issue. Navigation risks in the Strait of Hormuz have not yet been lifted, and effective shipping capacity continues to be compressed, supporting freight rates to remain strong. The market demand for South American routes was outstanding, with a price of US$8,663/TEU, an increase of 11.0% from the previous period, leading the increase among all major routes. The freight rate on the Australia-New Zealand route continued to rise to US$2,471/TEU, a weekly increase of 6.7%.

In terms of near-ocean routes, freight rates on many routes increased due to regional peak season demand and typhoon disturbances. The freight rate for exports from Shanghai Port to the basic port in Southeast Asia was US$796/TEU, an increase of US$68; the freight rate to the basic port in South Korea was US$232/TEU, an increase of US$20; the freight rate to the basic port of Kanto in Japan was US$334/TEU, an increase of US$11; the freight rate to the basic port of Kansai in Japan was US$319/TEU, the same as the previous period.

From a global perspective, the Drewry World Container Freight Index was last at 4,473 US dollars/FEU, a slight decrease of 1% from last week, which was mainly dragged down by the correction in freight rates on the Asia-Europe route and the US East Route. Drewry pointed out that the east-west container freight market is still plagued by both geopolitical and operational challenges. Issues such as continued uncertainty in the Strait of Hormuz, congestion at Asian ports and low water levels in the Rhine River are still disrupting the global supply chain.

It is recommended that relevant freight forwarders and cargo owners pay attention to changes in freight rates in a timely manner, check the latest shipping schedules in advance, and formulate reasonable cargo transportation plans. Especially for routes with tight space in the East and South America, they should lock in space as soon as possible to cope with the cost and timeliness risks caused by market fluctuations.