Consolidation market reduced shift control effect.
Container shipping rates have fallen for 24 consecutive weeks, but the decline has tapered off as shipping lines step up efforts to control capacity.
According to the latest data released by the Shanghai Shipping Exchange on December 2, the Shanghai Export Container Freight Index (SCFI) fell 58.54 points to 1171.36 points in the first week of December, down 4.76% from 5.89% in the previous week, falling for the 24th consecutive week and hitting the new low since late August 2020. Rates on major routes continued to fall across the board.
Among them, the FEU rate from the Far East to the West fell $59, or 3.94%, to $1,437, slightly less than the 4.04% decline in the previous week. Rates per FEU on the Far East to Eastern United States line fell $250, or 6.78%, to $3,437 for the week, widening from a 4.9% drop the week before.
Rates per TEU on the Far East to Europe line fell $15 to $1,085 for the week, converging to 1.36% from 6.14% in the previous week. Rates per TEU on the Far East to Mediterranean line fell $15 to $1,827 weekly, falling 0.18 per cent from 6.35 per cent in the previous week.
South America line (Santos) per TEU fell 251 yuan, or 11.03%, to $2025 weekly; Southeast Asia (Singapore) freight per TEU fell $66, or 21.78%, to $237 weekly.
The SCFI index fluctuated between 800 and 1100 points from 2018 to 2019. Since 2020, the SCFI index has been affected by the epidemic, and the lack of work and port congestion have caused chaos in the global supply chain. The SCFI index has been on the rise, reaching an all-time high of 5,109 points in the first quarter of this year. However, since the second half of this year, freight rates have fallen for six months and have not bottomed out yet, indicating the end of the epidemic dividend era.
Industry insiders said that container shipping companies continue to expand the scale of shift reduction to stabilize freight rates, the decline in freight rates in the last three weeks has been convergent, especially in Europe, the Mediterranean line weekly decline within 2%. In addition to the emergence of the cabin control effect, the cargo volume of European lines has been increasing since the end of November. It is reported that some container shipping companies under the shipping alliance intend to slightly increase freight rates from mid-December to the Spring Festival.
Container shipping companies predict that inflation will inhibit purchasing power and inventory digestion will take time, so freight rates may fluctuate in a range until the first quarter of next year. Even if European freight rates stabilize or rise slightly before the Spring Festival, in the first two to three weeks after the Spring Festival, Asian production bases will start construction one after another, and the cargo volume is insufficient, freight rates will still be corrected, and small rises and falls will be the main theme.
As a large number of new container ships will be delivered in the fourth quarter to the next two years, the challenge of oversupply will intensify, container shipping companies are bound to continue to expand and reduce combined shift and pump routes, not only to stabilize the spot price, but also related to the signing of European and American line length contracts.