html In early September, the downward pressure on container spot freight rates increased significantly, and the spot freight index released by the Shanghai Shipping Exchange fell by no less than 18.8% from August 26 to last Friday (September 9).
The biggest drop in spot freight rates on the east-west route is the Shanghai to California route. The route attracted a lot of extra cabin/capacity and a lot of new shipping companies to participate last year, as the route was once the most profitable trade route per nautical mile last year.
As container spot freight rates from Shanghai to California fell below $3,500/FEU last week, the route's revenue per nautical mile has now dropped to 60 cents.
Image source: Sindhi Maritime
This figure is equivalent to a decrease of more than half since early July (126 cents), when the revenue was still very attractive to shipping companies, as it was only about 11 cents lower than its highest value at the beginning of the year.
Alphaliner said that although such an income level of 60 cents/north is still twice that of 28 cents/north in January 2020, the rapidly declining spot freight will become the most worrying thing for some new shipping companies on this route and those logistics companies that spend high prices to rent ships on this route. Because these companies are relatively more dependent on the spot market.
Alphaliner said that the main reason for the decline in spot freight is weak demand for goods. Significant rise in energy costs and high inflation will obviously further affect consumer spending. It took nearly 7 months to fall from the peak of 5110 points to less than 4,000 points in July this year (July 22). However, just 6 weeks later (September 2), the index fell below 3,000 points, which is the first time since April 2021.
In addition, spot freight rates for Far East to the United States East Coast route have also declined, but the route has gradually declined since the beginning of the year and has not seen a significant decline of the same size as the West Coast in the past few weeks.
The decline in freight rates from Far East to the United States has not had that much impact on the market mainly because the severe congestion on the East Coast makes the ships actually busier than the periodic table shows.
Image source: Xinde Maritime
Currently, the average income per nautical mile from Shanghai to the east coast of the United States has dropped from 112 cents in January to the current 73 cents.
The income per nautical mile from Shanghai to New York (via Panama) is equal to the income per nautical mile from Shanghai to Rotterdam, and the sailing distances of the two are almost exactly the same.
Zoom in view of the relative decline in spot freight rates for China export containers over the past two weeks (see table above), it is obvious that freight rates on the China-US West Coast and China-Middle East routes have been hit hardest. The decline was 32, 1% and 28% respectively.
This article comes from "Xinde Maritime", author Xinde Maritime Network column
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