Flame retardant fabric_Flame retardant fabric_Cotton flame retardant fabric_Flame retardant fabric information platform Flame-retardant Fabric News Freight prices have fallen for the fourth consecutive time, and it is difficult for the US line to support the overall situation! The shipping price war may explode…

Freight prices have fallen for the fourth consecutive time, and it is difficult for the US line to support the overall situation! The shipping price war may explode…

Freight prices have fallen for the fourth consecutive time, and it is difficult for the US line to support the overall situation! The Shanghai Export Container Freight Index SCFI h…

Freight prices have fallen for the fourth consecutive time, and it is difficult for the US line to support the overall situation!

The Shanghai Export Container Freight Index SCFI has fallen for four consecutive weeks. The latest quotation on the 19th fell by 10.96 points to 972.45 points, a decrease of 1.11%.

The demand for the American route is weak and new orders are limited. The shipping company’s price increase plan in mid-May failed, and the freight rate is difficult to effectively support. This week, it fell by about 50 US dollars per FTU. The freight rate for the European and Mediterranean routes is relatively stable. It is estimated that the shipping company will still increase the price. Continue to stabilize freight rates by reducing and merging classes.

According to the latest SCFI index, the US wire market:

The US-Western freight rate fell by US$56 to US$1,329/FTU, a weekly decrease of 4.04%;

The US-Eastern freight rate fell by US$16 to US$2,365/FTU, a weekly decrease of 0.67%.

In response to the current situation, many freight forwarders pointed out that container shipping has returned to the buyer’s market, US retailers and importers are still destocking, and new orders are limited, resulting in spot market freight rates continuing to consolidate and bottom out.

With the arrival of the traditional peak season, it is expected that there will be a back-to-school wave, year-end holiday demand and replenishment from July, August to October. The volume of goods will be a key factor in whether the US line freight rates will stabilize or even increase.

However, it is worth noting that according to data released by the Federal Reserve Bank of New York, the New York Fed manufacturing index fell to -31.8 in May, and the orders index also experienced the largest decline since April 2020.

In addition, the spreading banking crisis and debt ceiling negotiations in the U.S. financial market have also adversely affected the future U.S. economic recovery.

Market analysts pointed out that the current market competition is becoming fiercer and price wars between shipping companies are inevitable, but it also means more opportunities and market vitality.

Meanwhile, spot freight rates in Asia-Europe markets remained stable this week, although first-quarter container throughput at the Port of Hamburg fell 17% year-on-year, reaffirming trade weakness.

According to data released by the Center for European Economic Research, Germany’s ZEW economic sentiment index fell to -10.7 in May, lower than expected, triggering concerns that Europe’s largest economy is headed for recession.

In addition, inflation in the Eurozone remains high and the European Central Bank continues to raise interest rates. European countries will face a tight financial environment and high energy prices, making future economic recovery more complicated.

For European routes, the latest SCFI index shows relative stability:

The freight rate on the route from Shanghai to Europe dropped slightly by US$1 to US$869/TEU;

The freight rate on the Shanghai to Mediterranean route increased slightly by US$4 to US$1,616/TEU.

According to other statistics, as of April 24, about 4.4% of the global container fleet (1.17 million TEU) was idle, down from the recent peak of 6.4% (1.68 million TEU). This is mainly due to the return of ships of 7,500TEU-12,500TEUS or above to the market. Will this increase shipping capacity? Oversupply drags down freight rates and is also a focus of observation.

It is understood that many large ships have returned to European routes. The impact on the market, including 2M’s deployment of nine ultra-large ships to the Asia-North Europe and Asia-Mediterranean service networks next month, has yet to be assessed.

However, the ultra-slow sailing of ships deployed on the loop operated by 2M is intended to absorb the capacity gradually introduced by newbuilding ships mainly owned by MSC, thereby maintaining the status quo of providing weekly capacity.

On the Australia-New Zealand route, the local market demand for various materials continues to stabilize and rebound. The relationship between supply and demand is good, and the market freight rate continues to rebound this week.

On May 19, the market freight rate (sea freight and sea freight surcharges) exported from Shanghai Port to Australia and New Zealand basic ports was US$279/TEU, a sharp increase of 24.0% from the previous period.

The freight rate on the route from Shanghai to Santos, South America increased by US$54 to US$2009/TEU, a weekly increase of 2.71%;

The freight rate on the route from Shanghai to Durban, South Africa increased by US$67 to US$1,417/TEU, a weekly increase of 4.96%.

The Drewry Composite Index (WCI) is down 1% for the week, but is down 77% compared to this time last year. Among them, the European line fell by 4%, and the Eastern US, Western US and Mediterranean were basically the same as last week.

Xeneta’s XSI index showed that the freight rate on the Asia-US West route fell slightly to US$454/FEU, while the Baltic (FBX) index showed that the freight rate on the Asia-US East route also fell slightly to US$2,325/FEU.

Spot freight rates on the transpacific route remain under pressure due to weak demand fundamentals, with the prospect of ocean carriers introducing the expected mid-June comprehensive rate increase surcharge GRI becoming increasingly dim.

Seroka, executive director of the Port of Los Angeles, said that warehouses across the United States are still facing destocking pressure, and the global economic slowdown and protracted labor negotiations between the United States and Spain have led to a slowdown in trade.

Shipping price war is about to explode

A few days ago, Hapag-Lloyd CEO Habben Jansen pointed out when the company released its financial report that freight rates have been lower than cost. Coupled with some recent developments in the market, it seems that container shipping is entering the abyss of a price war.

The latest bi-weekly market report provided by Alphaliner shows that in the two weeks before the report is released, the idle capacity of global container ships has dropped significantly, and about 160,000 TEU idle capacity has returned to the market. The industry is worried that a price war is about to begin.

Statistics released by Alphaliner every two weeks show that the entire idle capacity is currently 1.17 million boxes, and the ratio of the total idle ship capacity to the total capacity of the existing fleet has dropped from 5.3% in the previous report to the latest 4.4%.

The industry believes that cargo volume has rebounded recently.It depends on whether the rebounding quantity and the proportion of idle capacity returning to the market are comparable.

The total container volume imported into the United States in April reached 2.0202 million TEU, a month-on-month increase of 9% and an increase of 5% compared with April 2019. Among them, the volume of imported containers from China increased by 27%. But is the increase in April due to the unblocking of the epidemic in China? Orders received earlier will be fulfilled later.

Alan Murphy, CEO and analyst of shipping consultancy Sea-Intelligence, believes that there are three ways for the container shipping market to avoid a price war: a surge in demand, large-scale dismantling and idle capacity, and the refusal of container shipping companies to accept money-losing cargo. .

Although shipping companies do not seem to have good control over shipping capacity, the current freight level is still at the normal level before the epidemic. According to this scenario, the drop in freight rates is seen as a sign of market rebalancing rather than a price war.

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Author: clsrich