The Shanghai Containerized Freight Index (SCFI) has declined for four consecutive weeks, with freight rates on the U.S. West Coast route nearing the cost line.
According to the latest data released by the Shanghai Shipping Exchange on July 4, the SCFI index fell by 98.02 points to 1,763.49 points last week, a weekly drop of 5.26%. Among the four major long-haul routes, only the Europe route saw an increase in freight rates, while the other three routes continued to decline, with the U.S. routes experiencing significant drops of over 10%.
Last week, the freight rate from the Far East to the U.S. West Coast fell by $489 per FEU to $2,089, a weekly decline of 18.96%. The rate from the Far East to the U.S. East Coast dropped by $593 per FEU to $4,124, a weekly decrease of 12.57%. Meanwhile, the rate from the Far East to Europe rose by $71 per TEU to $2,101, a weekly increase of 3.49%. The rate from the Far East to the Mediterranean fell by $116 per TEU to $2,869, a weekly decline of 3.88%.
For regional routes, the freight rate from the Far East to Japan’s Kansai region remained unchanged at $312 per TEU, while the rate to Japan’s Kanto region also held steady at $321 per TEU. The rate to Southeast Asia dropped by $3 per TEU to $453, and the rate to South Korea stayed flat at $136 per TEU.
Industry insiders noted that as the U.S. gradually announces tariff rates for various countries, the impact of tariffs will begin to ease. Starting in July, freight rates will reflect normal market supply and demand. Currently, with no resumption of navigation in the Red Sea, vessel supply remains tight, and freight rates are expected to stabilize and rebound.
Over the past four weeks, U.S. route rates have seen consecutive sharp declines, with the West Coast route down 62.74% and the East Coast route down 40.57%. Last week, the West Coast rate approached the $2,000 threshold, nearing the cost line for alliance vessels, while non-alliance smaller vessels began to incur losses. The East Coast rate also neared the $4,000 threshold, prompting container shipping companies to significantly reduce trans-Pacific sailings in July to support rates.
According to earlier data from Drewry, approximately 7% (about 48 sailings) of major east-west routes will be canceled over the next five weeks, with 46% of these cancellations affecting the U.S. East Coast route.
On the other hand, the Europe route currently sees balanced cargo volume and supply. Shipping companies are controlling capacity, and some ports are congested due to water shortages, with berthing wait times of about 5 days to a week, which has helped support freight rates to some extent.
In its recently released *Container Shipping Market Review and Outlook for June 2025*, the Baltic and International Maritime Council (BIMCO) stated that despite new U.S. trade policies, the demand outlook for container shipping remains stable. It predicts only a slight weakening of the supply-demand balance in 2025–2026.
Niels Rasmussen, BIMCO’s Chief Shipping Analyst, said, “We maintain our previous assessment that container demand will remain stable despite uncertainties from new U.S. trade policies. Since our demand growth forecast already excludes the possibility of normal traffic resuming on the Red Sea-Suez Canal route, we expect only a mild deterioration in the supply-demand balance for 2025–2026.”
