Rates continue to skyrocket!
The early arrival of the peak season of European routes, as well as the demand for replenishment of inventory on the United States line, jointly promoted the general rise in freight rates of the whole route.
On May 31, the latest Shanghai freight Index (SCFI) rose 12.63% to 3044.77 points, rising for eight consecutive weeks and breaking through the 3,000 point mark, of which the United States and Africa routes increased the most significantly. It’s up nearly 57% in a month.
Specifically, the freight rate of the US-West route rose by nearly a thousand dollars, a weekly increase of 18.87%, and the freight rate of the US-East route rose by 11.17%.
Freight rates for Mediterranean and European routes also increased by 11.11 percent and 9.71 percent, respectively. Of particular note is that the U.S. West and U.S. East freight rates broke the $6,000 and $7,000 mark, respectively.
In terms of other routes, freight rates from Shanghai to West Africa, South Africa and South America have also increased significantly by $799, $936 and $343, respectively.
Freight forwarding industry insiders said that in addition to the peak season effect appeared in advance, some customers in order to reduce the impact of rising freight rates, choose to ship in advance, which also increased the volume of sea freight. In addition, the United States has imposed tariffs on imported electric vehicles, batteries, computer chips, medical supplies and other products, some of which will take effect on August 1, which has also prompted relevant companies to accelerate shipments in advance.
At the same time, the industry found that many companies in order to avoid tariffs, are gradually dispersed factories to West Africa, South America and other places, which further promoted the Far East to West Africa, South America transportation demand increased, prices also rose.
The shipping company has announced price increases from June 1, of which the United States line per 40 feet container price increase of $1,000, and an additional charge of about $600 peak season surcharge; The European line increases prices by $1200- $1500 per 40 feet container. SCFI’s offer this week partly reflects these changes. Due to the frequent shortage of boxes in the market, the industry expects that the freight rate in the third quarter will have the opportunity to maintain a high level.
The freight forwarding company pointed out that on June 1, each large box in the West of the United States was about 6400 US dollars, the East of the United States was about 7500 US dollars, and the European line was about 6300 US dollars, which was already a very high freight level, and the shipping company sent overtime ships in Shanghai and Shenzhen, the most serious shortage of space, in June, COSCO and OOCL also opened SEA32 regular routes for e-commerce goods. Only single rate (FAK) is charged, which is estimated to be a new route for the continuous delivery of new ships.
Shipping companies claim that the current shortage of vessels is due to the natural reduction of shifts caused by ship detours. However, freight forwarders pointed out that shipping companies also deliberately cut shifts, otherwise they could not send overtime ships to cope with the demand. As for shipping lines’ plans to raise freight rates significantly on June 1 and 15, there are super-large cargo companies predicting that U.S. officials and shippers’ organizations may take action to curb the surge in freight rates to avoid fueling inflation. Therefore, it is estimated that the freight rate should be lowered in July.
SCFI specific quotation:
Freight from Shanghai to Europe was $3,740 /TEU, up $331, or 9.71% weekly;
The Shanghai-Mediterranean freight rate was $4,720 /TEU, up $472 or 11.11% weekly;
The freight rate from Shanghai to West America was 6,168 US dollars /FEU, up 979 US dollars, or 18.87% weekly increase;
The freight rate from Shanghai to the East of the United States was 7,206 US dollars /FEU, up 724 US dollars, or 11.17% weekly increase.
In addition to other routes:
Shanghai to South America (Santos) per 20 feet container freight is 7408 US dollars, up 343 US dollars;
The freight rate of 20 feet container from Shanghai to West Africa (Lagos) is 6151 USD, up 799 USD;
The freight rate per 20 feet container from Shanghai to South Africa (Durban) is 4824 US dollars, up 936 US dollars.
Industry insiders analysis of the current shipping situation pointed out that due to the shortage of shipping capacity and the reduction of voyages led to a chain reaction. First of all, some ports are forced to “jump port”, causing some supply chains to break, affecting the United States, the East and west of the United States capacity scheduling; Secondly, there are even “blank flights” in some areas, that is, the original planned flights are cancelled, and when the flights resume again, they will face the problem of container scheduling, in addition, because some containers can not return in time at the port of discharge, resulting in a shortage of boxes.
In this case, in order to ensure the capacity of the main markets, shipping companies operating ocean-going routes will prioritize the distribution of containers to Europe, the United States, Central and South America and the Middle East, which further aggravates the shortage of boxes on the near-ocean routes.
