European Linehaul Rates Fell To $750-850/FEU!

Container shipping market has not yet ended the traditional peak season, freight rates have been falling for three consecutive weeks, the European line last week rumors that the Chinese market per TEU tariffs have fallen from 900 U.S. dollars to 750-850 U.S. dollars, compared with the cost price of about 1,000 U.S. dollars or 150-250 U.S. dollars, backhaul cargo is worse, from the 400-450 U.S. dollars per TEU to 20-100 U.S. dollars, while the third quarter of the quarterly rise in fuel oil up to the 22nd, the fourth quarter of the international four major energy and financial institutions are estimated that the price of oil will also be added to the high form of a rather unpromising

Industry insiders pointed out that the global ultra-large container ships are deployed in the European line; the age of these ships is very low; the construction costs are very high; it is difficult for shipping companies to do a large number of idles; so unlike the United States line of vessels, the idle proportion is high; and the stability of the tariffs is also much higher.

European line of the immediate low tariffs, mainly by charging the port of loading and unloading of container yard operation fee (THC) to make up for the charge in European ports per large box of about 150–200 euros, or about 8,000 yuan in Taiwan. Because of anti-monopoly measures, each company charges differently, but the gap is not large.

At present, the European line has been confirmed to be in a loss-operating state, while the US line freight rates are still above the profit level. However, an evaluation by a super large cargo collection company shows that the freight rate per large container in the US West is likely to fall below $1200 in the fourth quarter, and at current cost prices ranging from $1300 to $1500, any shipping company will face losses, with the current freight rate per large container being approximately $1700.

According to long-term tracking of container shipping stocks, the carrier's performance in the peak season of the third quarter (as of September 22) has been affected to some extent by the significant reduction in supply control by shipping companies and the impact of the Panama Canal drought and weight reduction. The Shanghai Shipping Exchange Container Freight Index (SCFI) increased by 1.6% in the quarter, while Singapore's marine fuel prices increased by an average of 21.3% in the third quarter. Therefore, it is reasonable to speculate that the profits of container shipping companies in the peak season of the third quarter will be significantly lower than the off-season level of the second quarter.

The person pointed out that, from the seasonal practice, the peak season of container shipping falls in July ~ October, especially in July and August, which are the most prosperous. At present, September is still in the peak season, but the latest September 22 SCFI index came to 912 points, which has been significantly lower than the second quarter's 981 and the third quarter's 997 (as of September 22); at the same time, the latest single day on September 22, Singapore bunker fuel 923 At the same time, the latest September 22 single-day Singapore bunker fuel price was 923 U.S. dollars, but significantly higher than the second quarter's average price of 702 U.S. dollars and the third quarter's average price of 851 U.S. dollars. In the next off-season in the fourth quarter, the SCFI Containerized Freight Index will be due to the off-season and continue to fall, but bunker fuel is likely to continue to go up (due to the oil-producing countries reducing production), and the fourth quarter profits of the shipping company will be even worse.

Recently, relevant information also shows that the international five major energy and financial institutions, four of which include the U.S. Energy Information Administration, Standard Chartered Bank, Goldman Sachs Group, JP Morgan Chase, etc., estimate that oil prices in the fourth quarter will rise by another 4-8%.

According to Drewry (Drewry) data, blank sailing has accounted for 16% of the trunk line capacity but has not been able to curb the decline in freight rates. Container Xchange warned in a recent report that, driven by new mega-ships, the continued expansion of capacity exceeds the existing demand, resulting in the trade routes, which are already in oversupply, being under considerable pressure.

Also, according to Alphaliner statistics, this year's container ship capacity supply growth was 8.2%, while demand growth was only 1.4%. Next year's supply growth was 9.0%, and demand growth was 2.2%.