The freight rate has ended three consecutive declines and achieved two consecutive increases! The latest Shanghai Container Export Freight Index (SCFI) has continued to rise again this period, following the previous period's return to 1000 points. It is also the second consecutive week of rise, with the index reaching 1032.21 points, up 21.4 points, or 2.12%.
Among the four major ocean routes, except for a slight decline in the US East, all others showed an increase, with the Far East to the Mediterranean showing the largest increase, reaching double-digit numbers. Specifically, the freight rates for European and Mediterranean routes have continued to rise, with increases of 8.7% and 10.07% respectively. The freight rates for the US West have slightly increased by 1.4%, while the freight rates for the US East have slightly decreased by 0.2%.
The latest Deloitte World Container Freight Index (WCI) has increased by 6%, with freight rates from Shanghai to Europe and the Mediterranean both experiencing a significant increase of 15%. The global shipping industry continues to experience a reduction in cabin load, with prices stabilizing in the low months. The revenue and profits of shipping companies in the fourth quarter will also be affected and will decrease. Several freight forwarder practitioners have stated that European inventories are gradually correcting to healthy levels, coupled with shipping companies reducing shipping schedules and controlling cabins, some ships have already reached full capacity in mid December, driving freight rates up for two consecutive weeks. Previously, several shipping companies announced that they would increase their FAK rates on December 15th, and recently adjusted them to January 1st. However, the freight rates have surged again, with an increase of $300-500, which is 20% of the previous increase.
Several shipping companies, including Maersk, DaFei, and Herbert, have announced that they will significantly increase the FAK rates for Asia to Nordic and Mediterranean routes starting from January 1, 2024.
According to overseas industry media reports, other shipping companies will follow suit and increase FAK rates by a similar amount in the coming days, in order to establish a solid financial foundation starting from 2024.
During this period, an increasing number of shippers have reported that they are no longer able to book seats for December on shipping companies' online booking platforms, mainly due to shipping companies attempting to squeeze the market by canceling approximately 40% of flights from China.
Industry insiders point out that there is currently not much cargo volume on the market, and it is entirely up to shipping companies to reduce schedules and reduce cabins to stabilize freight rates. Relatively speaking, there has not been a significant increase in cargo volume on the US route. The US East has increased its control over cargo hold capacity, coupled with the Panama Canal blocking ports and bypassing the Suez Canal, effectively supporting freight rates. On the West Coast, last week there were no ships arriving at the port on the THE West Coast, and non alliance ships competed for goods, causing a volatile situation. At present, the US Southwest route is also reported to be full, and multiple shipping companies have issued price increase notices, with an increase of approximately $200-300 per 40 foot container.
The industry expects that the volume of goods will gradually release at the end of the season and the end of the year. With the arrival of the Lunar New Year, manufacturers will rush to ship before the new year, which may help support freight rates.
