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Hits:Updated:2022-11-25 10:11:14【Print】
The container shipping market is in a tailspin, with rates falling for the 22nd week in a row, extending the decline.
Freight rates fell for 22 straight weeks
The Shanghai container freight index for export fell 136.45 points to 1306.84 last week, widening to 9.4 per cent from 8.6 per cent in the previous week and extending for the third straight week, according to the latest data released by the Shanghai HNA Exchange. Among them, the European line is still the hardest hit by the collapse of freight rates.
Latest route index:
The European line dropped $306 per TEU, or 20.7%, to $1,172, and is now down to its 2019 starting point and facing a $1,000 battle this week;
The price per TEU on the Mediterranean line fell by US $94, or 4.56 per cent, to US $1,967, falling below the US $2,000 mark.
The rate per FEU on the western route fell $73, or 4.47 per cent, to $1,559, up slightly from 2.91 per cent the previous week.
Eastbound freight fell $346 per FEU to $3,877, down $4,000, or 8.19 percent, from 13.44 percent the previous week.
According to the latest edition of Drury's Global Shipping Market report, the World Container Rate Index fell another 7 per cent last week and is down 72 per cent compared with the same period last year.
Industry insiders said that after the Far East - Western America line took the lead in falling, the European line since November has stepped into the wake of the decline, last week more than 20 percent. Europe's energy crisis threatens to speed up the local economic downturn. Recently, the volume of goods to Europe has fallen sharply, and freight rates have plummeted.
However, the latest rate declines on the Far East-West route, which led the decline, have moderated, suggesting that the market is unlikely to remain out of balance forever and will gradually adjust the supply picture.
Analysts in the industry pointed out that it seems that the fourth quarter into the ocean line off-season, the market volume is normal, the United States West line has stabilized, the European line has expanded the decline, the freight rate may continue to fall until the first quarter of next year after the Spring Festival; And the fourth quarter is the traditional peak season of the overseas line, with the Spring Festival is coming, the recovery of goods can still be expected.
Shipping companies in 'panic mode'
Ocean lines are in panic mode as freight rates plummet to new lows amid the economic downturn and a reduction in bookings from China to northern Europe and the west coast of the US.
Despite aggressive blank measures, which have reduced weekly capacity through the trade corridor by more than a third, these have failed to mitigate the sharp fall in short-term rates.
According to media reports, some shipping companies are ready to further reduce freight rates, relax or even waive demurrage and detention conditions.
One UK-based trucking executive said the westbound market appeared to be in a panic.
"I get about 10 emails a day from agents at very low prices," he says. Recently, I was offered $1,800 at Southampton, which was crazy and panicky. There was no Christmas rush in the westbound market, mainly due to the recession and people not spending as much as they did during the pandemic."
Meanwhile, in the trans-Pacific region, short-term rates from China to the West Coast of the US are falling to sub-economic levels, dragging down even long-term rates as operators are forced to temporarily cut contract prices with customers.
Some West Coast U.S. containers were flat this week at $1,941 per 40 feet, down 20 percent so far this month, according to the latest data from the Xeneta XSI Spot index, while East Coast prices were down 6 percent this week at $5,045 per 40 feet, according to Drewry's WCI.
The shipping company continues to stop sailing and skip port
Drury's latest figures show that in the next five weeks (weeks 47-51), 98 cancellations, or 13%, have been announced out of a total of 730 scheduled sailings on key trans-Pacific, Trans-Atlantic, Asian-Nordic and Asian-Mediterranean routes.
During this period, 60 percent of the empty trips will be on trans-Pacific eastbound routes, 27 percent on Asia-Nordic and Mediterranean routes, and 13 percent on trans-Atlantic westbound routes.
Among them, THE alliance canceled the most voyages, announced the cancellation of 49; The 2M alliance announced 19 cancellations; The OA Alliance announced 15 cancellations.
Drury said inflation remained a global economic problem as the shipping industry entered the winter holiday season, limiting purchasing power and demand.
As a result, spot exchange rates continue to fall, particularly from Asia to the US and Europe, suggesting that a return to pre-COVID-19 levels may be possible sooner than expected. Several airlines expect this market correction, but not at this pace.
Active capacity management proved to be an effective measure to support rates during the pandemic, however, in the current market, blanking strategies have failed to respond to weak demand and prevent rates from falling.
Despite the reduced capacity caused by the shutdown, the shipping market is still expected to move towards overcapacity by 2023 due to new ship orders during the pandemic and weak global demand.
The following is the summary of stops and departions from Mainland China to North America, Europe and Mediterranean in Week 46-51 (from November 14, 2022/12/25 to December 25, 2022/12) :
Summary of grounding and departure from port
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