In the past two years, sea freight rates have been continuously rising, and skyrocketing freight rates have been seen for a long time, bringing considerable pressure to foreign trade enterprises. After experiencing unprecedented prosperity, the recent decline in freight rates on major shipping routes has continued to expand, and the container shipping market is becoming increasingly competitive for goods

Freight rates have halved for 14 consecutive weeks! High pressure on shipping companies to fill in cargo tanks leads to price cutting and cargo grabbing

According to the latest data released by the Shanghai Airlines Exchange on September 16th, the SCFI index fell by 249.47 points to 2312.65 points last week, reaching a new low since December 2020. The decline slightly narrowed to 9.73% compared to the previous week. Compared to the historical high of 5109 points at the beginning of the year, the SCFI index has experienced a cumulative decline of nearly 55%. It has fallen for 14 consecutive weeks and has halved since its historical high at the beginning of the year.

SCFI trend chart

Among the main routes, the US West Line experienced a significant decline last week, with freight rates per FEU dropping by $434 to $3050, a decrease of 12.45%. Compared to the high point of $7900 at the beginning of the year, the US West Line is expected to miss the $3000 mark this week. The freight rate per FEU on the US Eastern Line is $7176, a weekly decrease of $591, a decrease of 7.6%, and a decrease of 40.08% compared to the high point at the beginning of the year.

The European line is also struggling to stop the decline, with a weekly drop of $332 to $3545 per TEU, a weekly decrease of 8.56%, a cumulative decrease of 54.53% compared to the high point at the beginning of the year. The Mediterranean Line's freight rate per TEU fell below the $4000 mark, dropping to $3777, a weekly drop of $445, or 10.54%.

The South American Line (Santos) freight rate per TEU decreased by $841 to $6342, a decrease of 11.71%. The Southeast Asian Line (Singapore) has a freight rate of $403 per TEU, a weekly decrease of $60 or 12.96%.

However, last week, the freight rates for the South Korean Line in the offshore route slightly increased by $12, with a price increase of $265 per TEU, a weekly increase of 4.74%, making it the only rising route among all routes

Industry insiders point out that the SCFI index is the average value that covers spot prices and long-term contract prices. Last week, the US West Line freight rate reached a turning point of $3050. But in the spot market, it has already dropped below $3000, and the spot price per FEU on the European line has also dropped by $5500-6000. The main routes have all experienced a significant decline, indicating a weak and sluggish consumer demand in Europe and the United States, and the pressure on shipping companies to fill in cargo has led to price cutting and cargo grabbing.

History is rare! The shipping company has suspended operations on a large scale and cancelled over a hundred voyages! Cancellation rate 16%

Due to the continuous decline in freight rates, consolidation companies have taken measures to regulate transportation capacity in an attempt to alleviate the decline in freight rates.

According to the latest data released by Drury on September 16th, the world's three major shipping alliances have cancelled a total of 101 voyages in the next five weeks (38th to 42nd weeks). 2M has announced the cancellation of 40 voyages, followed by The Alliance and Ocean Alliance, with 33.5 voyages and 27.5 voyages cancelled, respectively.

Among the 750 scheduled voyages on major routes across the Pacific, Atlantic, and Asia Nordic and Mediterranean, 122 voyages were announced for cancellation between the 38th and 42nd weeks, with a cancellation rate of 16%. During this period, 68% of the blank voyages will occur in the eastbound Pacific, 24% in Asia Nordic and Mediterranean, and 8% in the westbound transatlantic trade.

Drury stated that the container shipping market continues to be weak, with spot freight rates from China falling month on month, faster than expected, due to weak container demand, sufficient inventory, a shift in consumer spending from goods to services, and an uncertain economic environment. When shipping companies try to adjust their capacity and reduce freight demand, they have seen a large number of air freight on major east-west trade routes.

As the SCFI index continues to decline, shipping companies are also facing pressure to renegotiate long-term freight rates. Major consolidation companies, including Yangming Shipping and Wanhai Air Transport, have confirmed that the impact of price collapse has expanded. Customers have begun to request further negotiation of long-term freight rates from consolidation companies, and are facing pressure to adjust prices. They are gradually discussing with long-term customers, and it is not ruled out to provide flexible adjustments for different customers.

Here's a reminder that the shipping market is currently full of variables, with congestion at European ports and disruptions in strike operations continuing. Inflation has led to a global economic downturn, currency depreciation, and more! In the coming weeks, there will be a large-scale suspension of shipping, and there will be reasonable arrangements for shipping in the near future. Pay attention to risk prevention! Forward to Zhou Zhi~

来源：Drewry、国际船舶网、上海航运交易所等，维运网