News
The composite Shanghai Containerized Freight Index (SCFI) stood at 3,475.6 points in Week 25, up 2.9% from the previous week. The week-on-week increase was smallest since earlier May, indicating the rise of the composite index is losing momentum.
Looking at spot rates for container exports from Shanghai on the east-west trade lanes, they picked up 4.5% to $4,336 per TEU to Europe, 0.1% to $4,855 per TEU to the Mediterranean, 3.9% to $7,173 per FEU to the U.S. West Coast and 3.9% to $8,277 per FEU to the U.S. East Coast.
On the north-south routes, the SCFIs were dull to the Middle East Gulf and East and West Africa, falling 2% to $2,893 per TEU and 1.9% to $5,776 per TEU, respectively. On the other hand, they improved 1.3% to $1,406 per TEU to Australia and New Zealand, 3% to $8,558 per TEU to South America and 1.2% to $5,541 per TEU to Southern Africa.
In the intra-Asia waters, the SCFIs hiked 8.8% to $739 per FEU to Southeast Asia and 3.7% to $169 per TEU to South Korea. To Japan, they remained unchanged at $293 per TEU to Kansai and $299 per TEU to Kanto.
Shippers continue to consign cargo earlier than usual before freight rate are further raised, while demand remains steady. These factors are underpinning freight rate increases. However, steady demand, resulting from earlier shipment, will not last forever. In Europe, disruptions are ongoing due to dockworker strikes, a factor behind freight rate increases. Whether there are strikes at U.S. East Coast and Gulf Coast ports will become an import factor behind freight rate fluctuations.
Demand remains massive on the trade route to North America, where freight rates continue to stay brisk. Under such circumstances, major shipping lines have launched new services, increasing capacity. COSCO Shipping Lines and Orient Overseas Container Line (OOCL) have deployed additional six vessels in their Asia/west coast of North America service. SeaLead, BAL Container Line and other small intra-Asia service providers also cater to the trade.
On the trade channel to Europe and the Mediterranean, freight rates are on the rise due to brisk container movement and port congestion. Major operators, which made a general rate increase (GRI) in June, plan to impose another GRI of $1,000 per FEU in July.
In Germany, 24- to 48-hour strikes are staged successively at major ports, having adverse impacts on logistics. In France, meanwhile, President Emmanuel Macron has decided to call a snap election, and the decision has temporarily suspended dockworker strikes until September.
In Asia, major ports remain congested, keeping freight rates weak. The SCFI has, therefore, fallen below $700 per FEU for the first time since Aug. 22, 2022.
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 the same value on Oct. 16, 2009.
