News
The composite Shanghai Containerized Freight Index (SCFI) stood at 2,520.76 points in Week 20, up 9.3% from the previous week, according to the Shanghai Shipping Exchange (SSE). The composite index has remained on the rise for five weeks in a row to break the previous record that it hit in late September 2022.
Due to the Red Sea shipping crisis, services are being rerouted to the Cape of Good Hope, producing space shortages. As a result, the individual SCFIs increased on 11 of the 13 trade lanes from Shanghai to which they are applied.
Spot rates for container exports from Shanghai were favorable across the board on the east-west trade lanes, going up 6.3% to $3,050 per TEU to Europe, 1% to $3,957 per TEU to the Mediterranean, 14.4% to $5,025 per FEU to the U.S. West Coast and 8.3% to $6,026 per FEU to the U.S. East Coast.
Ex-Shanghai spot rates were more robust on the north-south routes, rising 4.6% to $2,221 per TEU to the Middle East Gulf, 22.4% to $6,686 per TEU to South America, 26.6% to $3,365 per TEU to Southern Africa and 22.2% to $4,605 per TEU to East and West Africa.
Within Asia, spot rates for ex-Shanghai container exports went down 1.3% to $305 per TEU to Japan’s Kanto, levelled off at $161 per TEU to South Korea and picked up 1.7% to $292 per TEU to Japan’s Kansai and 12.2% to $406 per TEU to Southeast Asia.
Containerships are being forced to run longer distances as they are traveling around the Cape of Good Hope to avoid the shipping chaos in the Red Sea, which has produced a shortage of some 10% in space supply by major shipping alliances. The situation is projected to persist for some time.
To maximize profitability, shipping lines are decreasing slot allocations for shipments moved on long-term contracts on the route to and from North America, leading to spot rate increases.
On the Asia-Europe trade, container movement has been on the rise recently, according to an analysis by Flexport. Many freight forwarders are, as such, demanding space, while importers in Europe are accelerating efforts to secure products in stock. It is anticipated, therefore, that operators will hike freight rates by $1,000 or even more or impose peak season surcharges of similar scales.