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Recently, the freight forwarding circle has revealed the quotation for receiving goods from Yantian to Longtan Port , with a large cabinet of $2,850, exceeding $3,000.
Last year, the prices of some US-Western routes exceeded US$30,000, and this year, the freight rates of US-Western routes have fallen by 80,000% from last year's high.
freight rate fell for 13 consecutive weeks, with a decline widening
The latest issue of the world's four major container freight indexes still fell sharply:
Shanghai Container Freight Index (SCFI) was 2562.12 points, down 285.5 points from last week, with a weekly decline of 10.0%, and has been falling for 13 consecutive weeks. It fell 43.9% from the same period last year.
Deluri's World Container Freight Index (WCI) has declined for 28 consecutive weeks, with the latest period falling by 5% to $5378.68/FEU.
Baltic sea freight index (FBX) global comprehensive index was US$4862/FEU, down 8% weekly;
Ningbo Shipping Exchange's Ningbo Export Container Freight Index (NCFI) closed at 1910.9 points, down 11.6% from last week.
SCFI latest period (9.9) freight rates continue to fall in all major routes:
North American routes: The performance of the transportation market has not improved, and the supply and demand fundamentals are relatively weak, resulting in market freight rates continuing to decline.
US-Western freight rates fell from $3959 last week to 3484/FEU, down $475 weekly, down 12.0%, US-Western prices recorded a new low since August 2020;
US-East freight rates fell sharply to $7767/FEU last week, down $551 weekly, down 6.6%;
European routes: the service industry shrinks, manufacturing industry declines, inflation soars, and the economy declines. The transportation market continues to be weak, and market freight rates continue to fall.
European basic port freight rate is US$3877/TEU, down 375 US dollars weekly, down 8.8%;
Mediterranean route: freight rate is US$4222/TEU, down 552 US dollars weekly, down 11.6%;
Persian Gulf route: freight rate is US$1481/TEU, down 286 US dollars weekly, down 16.2%.
Australia route: freight rate is US$2489/TEU, down 173 US dollars weekly, down 6.5%.
South American route: Reduced for 7 consecutive weeks, with freight rate of US$7183/TEU, down 798 US dollars per week, down 10.0%.
It is worth mentioning that the Shanghai export container freight comprehensive index shows that the freight rate has fallen for 17 consecutive weeks from the high point of the beginning of the year, and then rebounded for 4 weeks, and then fell for 13 consecutive weeks. It fell below the same level in the same period last year in late July. The market is falling continuously, and even the intraday decline can reach hundreds of dollars.
What causes sea freight prices to plummet?
Ding Chun, professor at the Institute of World Economics, School of Economics, Fudan University, said that the high inflation rates in European and American countries, coupled with geopolitical conflicts, the energy crisis, and the epidemic, have caused a sharp shrinkage of shipping demand, which is the main reason for the plummeting global shipping costs.
Ding Chun believes that although the current plunge is bringing the abnormally high freight rates back to a relatively normal level last year, "but this means that the sky-high shipping era of sea freight has come to an end."
China International Shipping Network CEO Kang Shuchun said that the imbalance between supply and demand has led to a plummeting freight rate.
Due to supply chain breaks during the epidemic, some materials in some countries were cut off from , and a "stocking wave" occurred in many countries, which also led to abnormally high shipping costs last year.
This year, due to the high pressure on global economic inflation, demand has declined. At the same time, the previously hoarded inventory market cannot be digested, which has caused European and American importers to reduce or even cancel goods orders, and the "order shortage" has spread around the world.
Chief Information Officer of in Shanghai International Shipping Research Center said that port and shipping big data shows that in the third quarter of last year, about 30% of the global container ship was in a berth, and this proportion fell to about 26% during the same period this year, which shows that the global shipping turnover capacity has been improved;
On the other hand, the demand for transportation capacity in global commodity trade has decreased, so it is inevitable that freight rates will fall.
Shipping companies face the pressure of renegotiating contract prices
As the market spot freight prices continue to fall, Yangming Shipping publicly admitted at a recent shareholder briefing meeting that the shipping company is facing the pressure of "renegotiating" contract freight prices, and stated that it has received a request from the shipper to lower the contract price. It has also become the first shipping company to publicly admit that it has received bargaining requirements from the shipper!
Yangming Shipping said: "In May, whether it was shipment to Europe or the United States, when negotiating the contract price, the shipper and we were optimistic about the market, so the contract price was very high, but the sharp drop in spot freight rates now put a lot of pressure on these contracts."
For the global shipping market, the third quarter is a traditional peak season. However, from July to September this year, the market failed to rebound as expected, but continued to fall under pressure, which made many industry insiders sigh.
In this regard, an earlier report released by Maersk also pointed out that the economic outlook of Western economies is weak and consumer demand is still sluggish, resulting in a mediocre performance during this year's freight peak.
Founder Medium Futures Researcher Chen Zhen believes that compared with the shipping prices that cost tens of thousands of dollars last year, the global shipping market in the fourth quarter is still not optimistic, and there will be a market that is not prosperous in the peak season, and freight rates will fall further.
Source: Foreign Cross Research Center, Foreign Shipping is comprehensively compiled from Global Network, Yi Shipping, Maritime Network, Shipping Online, etc.
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