Shipping Rates Plummet! The Three Main Alliance Shutdowns

The latest Shanghai Export Containerized Freight Index (SCFI) declined again by 3.33% to 999.25 points, falling below 1,000 points in one fell swoop. Europe and the United States four ocean routes tariffs fell simultaneously; the United States West and the United States East per 40-foot container tariffs fell 4.63% and 8.4%, respectively. The United States East has fallen below the $3,000 line, and the United States West will face $2,000 to defend the war. Europe's Mediterranean route per 20-foot container tariff fell 7.03% to 4.11%.

The latest issue of the DELHI WCI freight index fell 3.4% in Europe; the Mediterranean route saw a plunge of 10%–7%; the U.S. East slightly fell 1%; and the U.S. West slightly rose 2%.

Spot rates on trans-Pacific routes continued to rise in July and the first half of August as liner operators raised their GRIs, a trend that also affected Asia-Europe routes from early August. According to the data, this was precisely due to increased stops by liner operators to better match capacity and demand. However, by the end of August, this trend began to reverse, with spot rates on these major routes falling back again. Potential peak demand remains weak for now.

Forwarding industry insiders expect poor volume conditions on the Northwest and East US routes to be a key factor in the decline in rates on US routes. At present, it seems unlikely that a wave of shipments before Golden Week, coupled with the second half of the new ship launching a record number of new ships, will cause freight rates to fall. The shipping company, to deal with this situation, needs to increase the difficulty of the stopping efforts. Sea transportation in the third quarter of the traditional peak season is not prosperous; if there is no deferred replenishment in the fourth quarter of the tide, coupled with new ships continuing to be put into use, freight rates will face greater downward pressure.

According to SCFI's latest offer:

Shanghai to U.S. West freight rate of 2037 U.S. dollars per FEU, down 99 U.S. dollars, a weekly decline of 4.63%;

Shanghai to the U.S. East tariff: 2869 U.S. dollars/FEU, down 263 U.S. dollars, a weekly decline of 8.4%;

Shanghai to Europe line rate of 714 U.S. dollars/TEU, down 54 U.S. dollars, a weekly decline of 7.03%;

Shanghai to the Mediterranean Sea tariff: 1308 U.S. dollars per TEU, down 56 U.S. dollars, a weekly decline of 4.11%.

As for the near-ocean route line, the tariffs were up and down, in which the price per TEU from the Far East to Kansai, Japan, fell by US$1 to US$310 compared with the previous period; the price per TEU from the Far East to Kanto, Japan, remained flat with the previous period; the price per TEU from the Far East to Southeast Asia rose by US$10 compared with the previous period; and the price per TEU from the Far East to South Korea was US$145 per TEU, which was flat with the previous period.

In addition, some shipping companies argue that the global economic trend is still full of challenges and that the short-term downturn in the shipping market is still conservative and will continue to be a prudent response. As for the Panama Canal, which is facing a serious drought problem resulting in a drop in water level, the company will continue to pay attention to the relevant measures of the authorities and maintain the on-time rate of the U.S. Eastern route service.