News
The composite Shanghai Containerized Freight Index (SCFI) stood at 886.85 points in Week 39, which waned 2.7% from the previous week and has been on the decline for four weeks in a row. Due to a worsened supply-demand imbalance, the composite index fell below the 900-point line for the first time since May 2020. As spot rates were weak in September, the busiest month of the year, freight movement is expected to decrease through the end of the year. As such, freight rates are also projected to stay sluggish.
Spot rates for container exports from Shanghai were stagnant across the board on east-west trade lands, going down 3.9% to $599 per TEU to Europe, 4.2% to $1,166 per TEU to the Mediterranean, 3.4% to $1,729 per FEU to the U.S. West Coast and 6.2% to $2,249 per FEU to the U.S. East Coast.
On the route to Europe, the SCFI dipped below the $600-per-TEU mark for the first time since October 2019. Shipping lines are projected to aggressively control capacity throughout the fourth quarter (October-December).
The Shanghai-U.S. trade is foreseen to see blank sailings through next year's Lunar New Year (Feb. 8-14), owing to supply increases and weak demand, changes in consumption patterns in the U.S. and other factors. Freight rates are, for this reason, envisaged to dwindle at least for five more months.
In intra-Asia waters, ex-Shanghai spot rates slightly declined on the route to Japan, going down 0.6% to $306 per TEU to Kansai and 0.3% to $321 per TEU to Kanto. In contrast, they improved 1.1% to $176 per TEU to Southeast Asia and remained unchanged at $147 per TEU to South Korea.
Shipments from China decreased during the National Day Golden Week, which increased capacity for services from other economies in East Asia and triggered an imbalance between supply and demand. It is anticipated that shipping capacity adjustments will be made on larger scales on all trade this month.
The SCFI is an indicator for spot rates for container exports from Shanghai that do not include terminal handling charges (THCs). It was set at a baseline of 1,000 points on Oct. 16, 2009.
