The peak season for the container shipping market has arrived early, with the Shanghai Containerized Freight Index (SCFI) rising for eight consecutive weeks.
According to the latest data released by the Shanghai Shipping Exchange on June 18, the SCFI index rose by 136.47 points last week to 3121.69 points, a weekly increase of 4.57%. Freight rates on the four major deep-sea routes continued to climb, with the US West Coast route showing particularly strong gains, rising over 10% in a single week.
Last week, the freight rate per FEU on the Far East to US West Coast route increased by $582 to $5,683, a weekly increase of 11.41%; the Far East to US East Coast route rose by $552 per FEU to $6,873, a weekly increase of 8.73%; the Far East to Europe route rose by $94 per TEU to $3,158, a weekly increase of 3.07%; and the Far East to Mediterranean route rose by $88 per TEU to $4,260, a weekly increase of 2.11%.
On intra-Asia routes, the freight rate per TEU from the Far East to Kansai, Japan remained flat compared to the previous week at $323; the rate from the Far East to Kanto, Japan remained flat at $333; the rate from the Far East to Southeast Asia rose by $7 per TEU compared to the previous week to $689; and the rate from the Far East to South Korea rose by $27 per TEU compared to the previous week to $188.
Industry insiders pointed out that following the signing of a memorandum of understanding between the US and Iran, Iran has pledged to ensure the free and safe passage of commercial vessels in the waterway from the Persian Gulf to the Sea of Oman within the next 60 days. However, major container shipping companies such as Maersk remain cautious, believing it is still too early to judge the actual impact. They will only consider fully resuming Middle East-related route services after insurance arrangements and detailed waterway safety regulations are further clarified.
Hapag-Lloyd estimates that even if the Strait of Hormuz returns to normal navigation, it will take at least three months for the global shipping market to fully recover to normal conditions.
Market data shows that during the period of disruption in the Strait of Hormuz, cargo volumes on Middle East routes once dropped to 20% to 30% of pre-crisis levels, with a large amount of cargo forced to be diverted to ports in the UAE, Oman, and other locations, transported via sea-land multimodal methods. Once the strait reopens, previously backlogged cargo is expected to be shipped out intensively. Furthermore, the potential subsequent demand for transporting infrastructure reconstruction materials will also bring new cargo volume increments to the container shipping market.
However, after the US and Iran reached an understanding, international fuel prices immediately fell, leading to a simultaneous reduction in bunker surcharges. Consequently, the market anticipates downward pressure on freight rates for some routes. Nevertheless, container shipping companies generally believe that issues such as global port congestion, tight trucking capacity, and declining supply chain efficiency persist. Overall logistics costs remain at a relatively high level, limiting the room for freight rate reductions.
Taking Mediterranean Shipping Company as an example, its reference quotations for US-bound routes in the first half of July show freight rates of approximately $4,880 per TEU and $6,100 per FEU for the US West Coast route; for the US East Coast route, rates are approximately $7,200 and $9,000 respectively, remaining at high levels overall.
Despite this, the market remains vigilant about the subsequent trend. Industry analysis points out that if US-Iran negotiations continue to make progress, vessels that had taken detours due to geopolitical factors will gradually resume normal route operations. At the same time, the wave of newbuilding deliveries continues, with a large amount of new capacity entering the market. Once the situation in the Middle East stabilizes and routes return to normal, capacity supply will increase significantly. The container shipping market may then face renewed pressure from supply-demand imbalance, and the medium to long-term freight rate outlook is not optimistic.
