The Shanghai Containerized Freight Index (SCFI) ended its three-week decline and returned above the 1400-point mark, showing signs that freight rates have bottomed out.
According to the latest data released by the Shanghai Shipping Exchange on November 28, the Shanghai Containerized Freight Index (SCFI) rose by 9.57 points to 1403.13 points last week, a weekly increase of 0.68%. Among the four major ocean routes, except for the westbound US route where rates fell, freight rates on the other three major ocean routes stopped falling and rebounded.
Last week, the freight rate per FEU from the Far East to the US West Coast fell by $13 to $1632, a weekly decrease of 0.79%; the freight rate per FEU from the Far East to the US East Coast rose by $44 to $2428, a weekly increase of 1.85%; the freight rate per TEU from the Far East to Europe rose by $37 to $1404, a weekly increase of 2.71%; the freight rate per TEU from the Far East to the Mediterranean rose by $177 compared to the previous week to $2232, a weekly increase of 8.61%.
On the regional routes, the freight rate per TEU from the Far East to Japan’s Kansai region remained unchanged from the previous week at $312; the freight rate per TEU from the Far East to Japan’s Kanto region remained unchanged from the previous week at $321; the freight rate per TEU from the Far East to Southeast Asia remained unchanged from the previous week at $540; the freight rate per TEU from the Far East to South Korea fell by $2 compared to the previous week to $143.
Industry insiders stated that as the Christmas and New Year holidays approach, overall market shipping momentum is relatively weak. Ocean routes enter a low season in December, while regional route market demand enters a peak season. Benefiting from pre-Chinese New Year shipment increases in Asia, if regional route demand is sufficiently high, it is expected to offset the pressure from reduced cargo volumes on North American and European routes.
It is expected that freight rates on North American routes may only see a slight rebound from deep declines in the short term, but around the end of December, there might be an opportunity for a more significant increase due to pre-Chinese New Year restocking. As for European routes, due to service quality differentiation, different shipping alliances have begun to widen price gaps, with a difference of about $300 to $500 per FEU. Currently, the OCEAN Alliance’s European route rates are firm with plans for further increases, while the Premier Alliance, fearing cargo loss, is temporarily holding off on raising rates.
The industry estimates that in mid-to-late December and before the Chinese New Year in January next year, with Asian shipments and /American stockpiling, if the shipping momentum is strong enough, freight rates will then have a real opportunity to bottom out and rebound.
