Driven by the sharp increase in freight rates on the US line, the Shanghai export container freight index ended its three consecutive declines and rebounded again.
But how long the rally can last remains to be seen, according to industry insiders.
The US West Line rose 20% in a single week, and the US East Line rose 14.9%
According to the latest data released by the Shanghai Shipping Exchange on June 30, the Shanghai export container comprehensive freight index was 953.60 points, an increase of 3.2% from the previous period.
Among them, the strong rebound of the US line has pushed the freight rate in the spot market to rise sharply.
North American routes:
The market freight rate (shipping and shipping surcharges) of the basic port in the West Coast of the United States is US$1,408/FEU, an increase of 20%
The freight rate (sea freight and sea freight surcharge) in the East US basic port market is US$2,368/FEU, an increase of 14.9%
In addition, transportation demand on South American routes continues to perform well. The market freight rate (sea freight and sea freight surcharges) exported from Shanghai Port to South American basic ports is US$2,532/TEU, an increase of 4.7% from the previous issue.
However, some routes continued their decline.
For European routes, the market freight rate (shipping and shipping surcharges) exported from Shanghai Port to European basic ports was US$763/TEU, down 3.8% from the previous issue.
For the Mediterranean route, the market freight rate (shipping and shipping surcharges) exported from Shanghai Port to the Mediterranean basic port is US$1,466/TEU, down 7.7% from the previous issue.
The Persian Gulf route is the same as the previous issue, and the market freight rate (sea freight and sea freight surcharges) exported from the seaport to the basic port of the Persian Gulf is US$1,226/TEU.
The market freight rate of the Australia-New Zealand route fell this week. The market freight rate (sea freight and sea freight surcharge) exported from Shanghai Port to the basic port of Australia and New Zealand was US$260/TEU, down 4.4% from the previous period.
The latest global container liner route tracking data from Drewry shows that in the main east-west head-haul trade, a total of cancellations were announced between weeks 27 and 31 for the trans-Pacific, trans-Atlantic and Asia-North Europe Mediterranean routes. 40 flights, accounting for only 6% of the total planned flights of 674. During this period, 65% of blank sailings will occur on the eastbound trans-Pacific route.
Why did the US line rise so much in a single week?
The Shanghai Aviation Exchange report pointed out that the U.S. retail sales data in May was better than market expectations, which shows that the U.S. economy still has a certain degree of resilience and plays a certain supporting role in North American route transportation demand.
Transportation demand is stable, supply and demand are balanced, and shipping companies have implemented price increase plans, driving freight rates in the spot market to rise significantly.
As for the continued decline in the European and Mediterranean lines, the Shanghai Shipping Exchange report believes that this is due to the Eurozone manufacturing PMI being 43.6 in June, which fell to the lowest level in 37 months. The manufacturing recession has intensified and the Eurozone business growth has almost stagnated. , worried that the euro zone economy may fall into recession.
Transportation demand lacks growth momentum and the balance between supply and demand is not ideal, leading to a continued downward trend in market freight rates.
Is the peak replenishment season coming in Europe and America? Many companies raised surcharges (GRI) in July
Starting from July, various liner companies have also begun to increase the GRI of the North American line, and the freight rate per 40-foot container is expected to increase by US$500-1,000.
Recently, CIMC Chairman and CEO Mai Boliang said in an interview that in fact, starting from the second quarter, market demand in the container shipping industry has shown a gradual recovery trend, and freight rates and cargo volumes have stabilized.
This is supported by the business operators of standard goods solicitation. One of the business operators of standard goods solicitation said, “I feel that the volume of goods has really come back, and it is better than in April and May.”
U.S. terminal retail sales are expected to rebound. Coupled with my country’s aggressive economic stimulus policies, not only freight rates in the container shipping industry have increased, but the comprehensive rate surcharge (GRI) has also increased in July.
Therefore, some container shipping industry members believe that the container shipping industry may usher in a peak season in the third quarter.
According to BIMCO, under the basic scenario, the growth range of global container shipping volume in 2023 will be 0.5%-1.5%, and the growth range in 2024 will be 5.5%-6.5%.
Volumes and growth rates are expected to recover in the second half of 2023, with total volumes on major outbound and regional routes expected to be approximately 7% higher by the end of 2024 than in 2022.
However, many industry insiders said that the current actual cargo volume in the European and American markets is not large, and the support for freight rate increases is limited, and the later trend remains to be further observed.
In addition to the increase in cargo volume, there are two major reference factors for the rise in container freight rates in the third quarter:
The International Maritime Organization (IMO) may tighten new carbon emission regulations again: recent news said that IMO will start to review the regulations for new ships in July. If the tightening continues, old ships will continue to withdraw from the freight market, and freight rates will be affected upwards. , which is also an important reference indicator for peak season performance in the second half of the year and the continued rebound in freight rates.
Although the problem of dock workers’ work slowdown in the western United States has just been resolved, workers at the Port of Vancouver, Canada’s busiest, and other ports on the West Coast went on strike due to the breakdown of labor negotiations. Some insiders in the shipping industry have commented that this labor dispute may disrupt global freight transportation.
Operations are still full of variables and challenges.