Data recently released by U.S. research company Descartes Datamyne showed that in August, maritime container traffic from Asia to the United States decreased by 1% year-on-year, marking the first time in 26 months that there has been a year-on-year decline.
At the same time, the downward trend in container ship freight rates has intensified. It has only been a week since the US-Western shipping freight fell below the US$3,000 mark, and the latest market freight has quickly fallen to the US$2,500 level. In response, shipping companies have also stepped up their efforts to suspend sailings.
Freight prices have fallen for 14 consecutive weeks
The latest issue of the world’s four major container freight indexes still fell sharply:
The Shanghai Container Freight Index (SCFI) was 2312.65 points, down 249.47 points from last week, with a weekly decline of 9.7%, and has fallen for 14 consecutive weeks. Down 50% from the same period last year.
Drewry’s World Containerized Index (WCI) has declined for 29 consecutive weeks, with the latest decline extending to 8% to $4,941.91/FEU.
The Baltic Freight Index (FBX) global composite index was US$4,653/FEU, down 4% on the week.
The Ningbo Export Container Freight Index (NCFI) closed at 1762.8 points, down 7.8% from last week.
In SCFI’s latest issue (9.16), freight rates on major routes continued to fall:
North American route: The US-West freight rate fell from US$3,484 last week to US$3,050/FEU, a weekly drop of US$434, a 12.5% drop; the US-East freight rate fell sharply from US$7,767 last week to US$7,176/FEU, a weekly drop of US$591. , down 7.6%.
European route: The European basic port freight rate is 3,545 US dollars/TEU, down 332 US dollars or 8.6% on the week.
Mediterranean route: freight rate was US$3,777/TEU, down US$445 or 10.5% on the week;
Persian Gulf route: The freight rate was US$1,232/TEU, a week-on-week decrease of US$249, or 16.8%.
Australia-New Zealand route: The freight rate was US$2,262/TEU, a weekly decrease of US$227, or 9.1%.
South America route: The freight rate is US$6,342/TEU, a weekly decrease of US$841, or 11.7%.
Among them, the West American, Persian Gulf, Mediterranean, and South American routes suffered larger declines, with weekly declines of 12.5%, 16.8%, 10.5%, and 11.7% respectively.
Analyst firm Xeneta noted that rates from China to the U.S. West Coast have actually plummeted. Container shipping prices from Shanghai to California on the US west coast have now fallen by no less than 49% since reaching a record high in March this year.
Meanwhile, the spot freight rate for shipping a container from Southeast Asia to the United States has fallen 69% since March this year, with both shipping hubs in China and Southeast Asia now at $4,300/feu.
Peter Sand, chief analyst at Xeneta, said: “It looks like a case of ‘the bigger you get, the harder you fall’, with ocean freight rates in Southeast Asia following the general trend, just more drastic. However, rates have only come down from record highs, So operators don’t need to panic.”
Shipping companies set off unprecedented wave of suspension of sailings
Although the suspension of sailings and port hopping does not seem to stop the decline in freight rates, shipping companies are still increasing their efforts to suspend sailings.
According to the latest data released by Drewry, in the next five weeks (weeks 38-42), the world’s three major shipping alliances have canceled a total of 101 voyages.
2M has announced the cancellation of 40 voyages, followed by The Alliance and Ocean Alliance, which have canceled 33.5 and 27.5 voyages respectively.
On major routes such as Trans-Pacific, Trans-Atlantic and Asia-North Europe and Mediterranean, 122 sailings were canceled between weeks 38 and 42 out of 750 scheduled sailings, a cancellation rate of 16%.
During this period, 68% of blank sailings will occur in the eastbound transpacific trade, 24% in the Asia-North Europe and Mediterranean trade, and 8% in the westbound transatlantic trade.
Drewry said the container shipping market continued to weaken, with spot rates from China falling month-on-month at a faster-than-expected pace, as weak container demand, ample inventory, a shift in consumer spending from goods to services and an uncertain economic environment all contributed to at this point.
Shipping lines have announced sailing suspensions on major east-west trade routes as they try to adjust capacity to match falling freight demand. (On Oct. 22, Drewry tracked sharp year-over-year declines in deployed capacity in the Asia-Europe and Asia-WCNA trades.)
Drury added that port congestion and operational disruptions continue, with newly confirmed port action at the ports of Liverpool and Felixstowe creating challenges for the container shipping market, with shippers and BCOs struggling to place orders and forecast deliveries.You will be busy weighing risks all the time.
It is reported that Alphaliner wrote in its latest update that Maersk and MSC are canceling multiple sailings from China to Europe, indicating that the carrier predicts that demand for container freight will continue to decline in the future.
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