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The composite Shanghai Containerized Freight Index (SCFI) reached 3,044.8 points in Week 22, which jumped 12.6% from the previous week and has remained on an upward trend for six consecutive weeks. The individual SCFIs improved on 12 of the 13 trade lanes to which they are applied. The composite index, as a result, exceeded the 3,000-point line for the first time in 21 months since August 2022. It was 36% higher than the pre-pandemic high of 2,239.61 points.
Spot rates for container exports from Shanghai were favorable across the board on the east-west lanes. They went up 9.7% to $3,740 per TEU to Europe, 11% to $4,720 per TEU to the Mediterranean, 18.9% to $6,168 per FEU to the U.S. West Coast and 11.7% to $7,206 per FEU to the U.S. East Coast.
Ex-Shanghai spot rates were robust on the north-south routes as well, increasing 6.3% to $2,542 per TEU to the Middle East Gulf, 4.1% to $1,342 per TEU to Australia and New Zealand, 4.9% to $7,408 per TEU to South America, 24.1% to $4,824 per TEU to Southern Africa and 15.7% to $6,191 per TEU to East and West Africa.
In the intra-Asia waters, spot rates for containers from Shanghai grew 21.6% to $547 per TEU to Southeast Asia, 1.2% to $163 per TEU to South Korea and 0.3% to $293 per TEU to Kansai, Japan. They, on the other hand, fell 2% to $299 per TEU to Kanto, Japan.
This year’s peak season has begun earlier than usual, already causing congestion at major ports. On top of it, U.S. importers project that transport demand will remain brisk until autumn, when the traditional peak season begins. As of May 20, however, there were only 57 containerships of 139,984 TEUs were waiting to be berthed, according to AXSMarine’s Alphaliner. which only accounted for 0.4% of the global fleet and was as small a percentage as during the coronavirus pandemic in February 2022.
Freight movement is expected to increase between the U.S. and China as Washington has announced that import tariffs on EVs, semiconductor and other products from China will be raised in August. Shipping lines again cut space allotments for non-vessel-operating common carriers (NVOCCs) and freight forwarders to maximize profitability from higher spot rates. As such, there are a growing number of moves to secure future space on ships to be operated in four weeks or ahead as soon as possible, which are estimated to accelerate freight rate increases.
On the Europe trade, spot rates are surging, but shippers and freight forwarders are complaining that they are actually increasing more steeply. They are estimated to fluctuate between $6,000 and $7,500.
In Asia, there is congestion at Singapore, Port Klang and others, which has led to lifting freight rates, while in India, space and container shortages are reported.
The SCFI represents spot rates for container exports from Shanghai that do not include terminal handling charges (THCs), which was set at a baseline of 1,000 points on Oct. 16, 2009.
