Freight rates drop for 11 consecutive weeks! Weekly decline of 8%! Biggest drop since the pandemic!
Affected by persistent global inflation and weakening demand, container freight rates continue to decline. The latest Shanghai Containerized Freight Index (SCFI) stands at 3154.26 points, down 275.57 points from last week, a weekly drop of 8.03%, marking the largest single-week decline since the pandemic and the 11th consecutive weekly decrease.
Far East to US West Coast freight rate at USD 5,134/FEU, down USD 648 week-on-week, a decline of 11.21%;
Far East to US East Coast freight rate USD 8,801/FEU, down USD 191 week-on-week, a decrease of 2.12%;
Far East to Europe freight rate USD 4,441/TEU, down USD 347 week-on-week, a decrease of 7.25%;
Far East to Mediterranean freight rate is USD 5,071/TEU, down USD 412 week-on-week,
Southeast Asia Route freight rate at USD 591/TEU, down USD 158 week-on-week, a decline of 21.09%;
Persian Gulf Route, freight rate at USD 2,057/TEU, down 7.8% from the previous period.
Australia-New Zealand Route, continuing to ease, freight rate at USD 2,797/TEU, down 2.0% from the previous period.
South America Route: Declined for five consecutive weeks, with a freight rate of USD 8,828/TEU, down USD 137 week-on-week, a decrease of 1.53%.
Among them, the US West Coast, Mediterranean, and Southeast Asia routes saw significant declines last week, with week-on-week drops of 11.21%, 7.51%, and 21.09% respectively. The steepest decline was on the Southeast Asia route, with a weekly drop of 21.09%, mainly dragged down by sharp falls in freight rates on the Vietnam and Thailand routes.
Major freight forwarding companies have noted that the decline in freight rates on the US West Coast route accelerated last week. In Shanghai, the rate per FEU dropped to USD 4,600 on Monday and fell further to USD 4,200 by the weekend, while in South China it was around USD 4,400. Both Europe and the US are facing rail, road and port strike issues. The strike at the Port of Felixstowe in the UK continued through Sunday, and Hamburg in Germany is experiencing severe port congestion. It is currently known that nearly half of the sailings on the European route will be cancelled in September, and the market situation remains unstable.
With inflation looming over European and US markets, demand is sluggish and inventories are piling up. As cargo volumes shrink, shipping lines face pressure to fill vessel space, triggering price wars to secure cargo and making the downward trend in freight rates inevitable. Exporters in Asia have noted that after two quarters of inventory digestion in Europe and the US, combined with seasonal demand, purchasing volumes have started to increase, with results expected to be visible in the fourth quarter. However, the reality is that major US retailers have "cancelled billions of dollars in orders" to cope with the inventory buildup of non-essential goods over the past few quarters. In addition to order cancellations, price reduction measures have also been taken for lower-volume categories.
The latest data released by other major freight rate indices shows that spot market rates continue to decline. Drewry's The World Container Index (WCI) has declined for 26 consecutive weeks, with the latest WCI composite index continuing to drop sharply by 4% to $5,985.53 per FEU, down 39% compared to the same period last year. The Shanghai–Los Angeles freight rate fell 6%, or $394, to $6,127 per FEU; the Shanghai–Rotterdam rate dropped 5%, or $420, to $8,010 per FEU; the Shanghai–Genoa rate decreased 2% to $8,391 per FEU; and the Shanghai–New York rate slipped 1% to $9,569 per FEU. Drewry expects freight rates to continue declining in the coming weeks.
The Freightos Baltic Index (FBX) Global Composite stands at $5,703/FEU, down 2% week-on-week; US West Coast rates fell sharply by 6% to $5,419/FEU; US East Coast rates dipped 1% to $9,085/FEU; and Mediterranean rates decreased 2% to $10,235/FEU. Only North Europe rates edged down 1% to $9,979/FEU.
★ Service Suspension ★
According to the latest data released by Drewry, over the next five weeks (Weeks 35–39), the three major global shipping alliances will cancel a combined total of 53 sailings.Among them, the highest number of cancellations comes from THEAlliance. reaching 23 voyages; 2MAlliance reached 22 voyages, while the Ocean Alliance, with the fewest cancellations, still had 8 voyages;
Out of a total of 747 scheduled sailings on major routes such as Transpacific, Transatlantic, Asia-North Europe, and Asia-Mediterranean, 65 sailings were cancelled between Week 35 (Sep 29–Oct 4) and Week 39 (Oct 26–Nov 2), representing a cancellation rate of 9%. According to the latest data from Drewry, during this period, 55% of blank sailings will occur on the Transpacific Eastbound trade lane.
Despite slowing demand and falling freight rates during the peak season, the market remains at extraordinary levels. The Port of Felixstowe, the UK's largest container port, is facing severe disruption due to strikes. Some carriers have implemented port omissions, diverting UK-bound cargo to other European ports, but the situation at those ports is hardly any better, with strikes at the Port of Liverpool and by rail workers looming next.
During the critical Halloween and Christmas periods, shippers and BCOs may face delays and associated additional costs. Drewry urges UK shippers and importers to monitor the situation closely and work closely with their freight forwarding partners to avoid unexpected delays and extra costs wherever possible.
Below is a summary compiled by EASY SCHEDULE of blank sailings and port omissions from Mainland China to North America, Europe, and the Mediterranean for Weeks 35–40 (from August 21, 2022 to October 1, 2022):
Blank Sailings & Port Omissions Summary (Swipe to view)
Source: Ningbo Shipping & Maritime Network
