The prices of the West Coast and East Coast routes are still falling
On the 29th, the latest Shanghai Container Export Freight Index (SCFI) showed an upward trend, with an increase of 3.41%, reaching 2233.83 points, ending two consecutive weeks of decline. This increase was mainly driven by the strong performance of the European and Mediterranean lines, which rose by 22.49% and 19.9% respectively. However, the West Coast and East Coast routes continued their downward trend, dropping by 12.46% and 0.86% respectively.
Industry insiders point out that the volume and supply of goods in Europe are stable, so it is expected that freight rates on the European route will continue to rise. As for the US West Coast, it is expected that it may not stop falling until the second half of December. As for the impact of Trump's tariff policy on freight rates, further observation is needed at present.
Considering that the Lunar New Year next year will be brought forward to the end of January, the industry expects to see the traditional situation of buying goods before the New Year to boost the volume of goods in mid December. At that time, the freight rates on the US route will have the opportunity to stop falling or even rise. Multiple freight forwarders have stated that the current cargo volume remains stable, but the US West Coast route has experienced a decline in freight rates due to excessive supply of capacity, resulting in a cumulative drop of $1481 over the past four weeks. The loading rate of ships on the US East Coast route is still good, and the decline has narrowed this week, entering a consolidation phase. The loading rate of ships on European routes is also performing well. As it is the final moment for signing long-term contract prices next year, major airlines are pushing up freight rates again, hoping to support long-term contract prices with spot prices.
According to the freight forwarder, they have received notices from several major airlines to increase the freight rates for European routes, with the freight rate per 40 foot container rising to $5500-6300 on the 29th. However, there were reports in the market that shipping giant Maersk raised its price to $5200 from December 2-8, and then lowered it to $4700 from December 9-15. Other airlines are expected to react to this, and the increase may be discounted.
Industry analysis suggests that Maersk may be offering discounted prices for out of stock ports. There is also a theory that, considering the major reshuffle of the shipping alliance in February next year, the new "Gemini Alliance" formed by Maersk and Hapag Lloyd has already accepted reserved seats in early December. In order to seize market share and customers, airlines may adjust their tariff strategies, resulting in fluctuations in tariff increases.
Industry insiders say that the steady increase in European freight rates is mainly due to stable cargo volume and supply, as well as the upcoming signing of long-term contracts and prolonged unloading times at various ports due to poor weather conditions, which have jointly driven the sustained rise in freight rates. It is expected that the freight rate for the European route may rise to $6200 in early December.