The peak season was overdrawn in advance, and the market was rushed out of the market

The concentrated shipments that have lasted for several months are gradually cooling down, and the container transportation market is gradually shifting from "snatching for containers due to lack of space" to a rebalancing of supply and demand. The latest Shanghai Export Container Freight Index (SCFI) fell for the second consecutive week, and the cumulative decline of the US-West Route this month has exceeded 20%. As the demand for early shipments is basically released and new shipping capacity continues to be released, the market momentum has significantly weakened. Affected by factors such as port congestion and Panama Canal navigation restrictions, freight rates on the East Coast route still maintain a certain degree of resilience. The subsequent trend will depend on the pace of shipping companies' capacity regulation and the performance of European and American terminal demand.

On July 17, the Shanghai Shipping Exchange released the latest SCFI, which was reported at 3080.31 points, down 104.52 points or 3.28% from last week. It was the second consecutive week of correction and ended the previous ten consecutive weeks of strong market growth.

Since April, driven by the demand for advance stocking triggered by U.S. tariff policies, a large number of goods have been shipped intensively and space has been tight. The cumulative freight rate of major global routes has increased by more than 70%. As shipping companies continue to increase shipping capacity and continue to launch overtime ships, the tight supply situation gradually eases, and the market enters a phased adjustment cycle.

The U.S. routes have entered a high-level correction stage, and the adjustment to the West American route has been the most obvious. Since this month, the cumulative decline in spot freight rates in the West Coast has exceeded 20%, mainly due to the continued release of new shipping capacity, the significant increase in space supply, and the rapid relief of space rush pressure.

In contrast, the performance of the East US market has been relatively strong. Due to factors such as long voyages, port congestion, Panama Canal navigation restrictions, and reduced ship turnover efficiency, the recovery rate of shipping space in the Eastern United States is slower than that in the Western United States, and shipping schedules are still delayed on some routes. Changes in geopolitics and U.S. trade policy have also increased market uncertainty. In the short term, traditional peak season stocking demand can still provide certain support, but the previous concentrated shipments caused by the tariff window have basically ended, and the US line as a whole may enter an adjustment stage after high levels of shock.

The supply and demand relationship in European routes is improving. Shipping companies have successively lowered FAK quotations in late July and actively solicited cargo by increasing suspensions, lowering peak season surcharges, expanding low-price contract space, and relaxing booking restrictions to slow down the downward trend in freight rates. However, the pressure on the supply chain of major European ports has not yet been completely relieved. Ports such as Antwerp, Hamburg, and Le Havre are still affected by labor shortages, terminal efficiency, and weather factors. The average waiting time for ships remains at 2 to 3 days. There is still a certain pressure on branch lines and inland distribution.

The Mediterranean routes have simultaneously entered the adjustment stage. As peak season cargo volumes are gradually digested and market supply and demand tend to be balanced, shipping companies have begun to release more low-price shipping spaces, and actual transaction prices have loosened. Although the overall space supply has improved significantly, bookings in some areas of the Eastern Mediterranean and Black Sea are still tight, and supply and demand in some markets have not yet fully recovered.

Latin American routes have simultaneously entered a phased correction. Shipping companies as a whole still maintain the space control strategy and only make slight adjustments to the capacity of some routes. However, with the increase in overtime ships and the gradual elimination of the early backlog of cargo, freight rates on routes such as East South America and Mexico continue to fall. Exports from photovoltaic, electromechanical equipment, auto parts and other industries have remained stable, supporting the market; some general cargo customers tend to wait for freight rates to fall further before arranging shipments. The return efficiency of empty containers is still low in some areas, and the supply of 40-foot regular containers, high containers and refrigerated containers is still temporarily tight.

The biggest change in the market this year is not that the peak season disappears, but that peak season demand is overdrawn in advance. Affected by the uncertainty of the U.S. tariff policy, a large number of orders originally from July to September were moved to May and June for shipment, forming a rush for shipments that lasted for several months, driving freight prices to rise rapidly. However, this growth mainly comes from the forward movement of shipment time, rather than a significant increase in terminal demand.

With early shipments basically completed, the market has entered a gap period after demand is released, while new shipping capacity continues to be delivered, and the relationship between supply and demand has changed accordingly. Freight rates have gradually shifted from "cargo owners grabbing cabins" to "shipping companies controlling cabins." In order to stabilize prices, shipping companies have stepped up efforts to suspend sailings, combine sailings and adjust routes, in an attempt to reduce the supply of effective shipping capacity. However, judging from market feedback, the actual implementation results of the FAK increase plan for the Asia-Europe route and the new round of price increase plan for the trans-Pacific route are not as good as expected. Some shipping companies have extended the original quotation or privately provided discounts.

For some time to come, shipping company capacity regulation will remain an important variable affecting the market. However, as the bonus of rushing shipments gradually fades, the container shipping market has entered a new game stage. Whether freight rates can remain high ultimately depends on whether the actual cargo volume can continue and whether the shipping company's price stabilization strategy can have lasting effects.