Starting from November 1st, the European and American routes plan to significantly increase freight rates!
After February of this year, the global capacity of idle container ships has once again exceeded 1 million boxes (20 foot containers). According to new data from Alphaliner, as of October 9th, there were 315 ships with approximately 1.18 million TEUs of idle capacity. Compared to the survey conducted on September 25th, there was a net increase of 44 ships and 233504 TEUs, with idle capacity accounting for 4.3% of the total container capacity, up from 3.4% two weeks ago, This week, the freight rates for each large container (40 foot container) on the US West route have been increased by approximately $100. On November 1st, both European and American routes are planning to significantly increase freight rates.
China's export shipping routes have recently become full, with the US route being the most popular. However, according to media reports, the main reason is that shipping companies have previously reduced their capacity, coupled with the delayed Black Friday and Christmas export season in the United States this year, which is not a real increase in cargo volume.
According to reports, there have been market rumors recently that multiple routes in the container transportation market, such as the US, East China, and Southeast Asia routes, have experienced cabin explosions. Several international freight forwarding companies have stated that there is indeed a trend of price rebound on these routes. Some importers and exporters have stated that there is no space available for the US route by the end of the month.
Several freight forwarders have stated that although multiple routes have experienced cabin explosions, it is mainly because shipping companies have reduced their ship capacity and hope to increase long-term agreed freight rates for next year. Therefore, they have reduced their capacity and increased freight rates at the end of the year.
A freight forwarder further stated that due to the man-made nature of the explosion, it was not a real increase in cargo volume. As for the current level of explosion, the freight forwarder revealed, "It's just a little bit more than normal, not too much
According to reports, in addition to the suspension of shipping companies and cabin shrinkage on US routes, the aforementioned freight forwarder stated that there are also reasons for the concentration of demand from American Black Friday shopping festival and Christmas cargo owners. In previous years, most shipments on the US route for Black Friday and Christmas were made during the peak season from July to September. However, this year there may be delays due to shippers watching Black Friday and Christmas consumption, as well as factors such as the presence of express ships departing from Shanghai to the United States
On the 20th, the Container Freight Index (SCFI) released by the Shanghai Shipping Exchange rose 2.93% in a single week, reaching 917.66 points. According to Alphaliner statistics, during the first quarter of the Lunar New Year, the demand for goods was very low. In February, the number of idle container fleets reached 1.68 million TEUs, accounting for 6.4% of the total container capacity at that time.
After a significant idle capacity, the freight rates on the US West route immediately responded, increasing by approximately $100 per large container. The market freight rates range from $1400 to $1800, and the shipping company is expected to increase them to $2300 on November 1st. This week, the freight rate per large container on the US East route remained between $2200 and $2400, while the European route remained unchanged at $800 per large container. Major shipping companies have announced that on November 1st, each large container on the European route will be increased to $1500- $1800 (depending on each company), but it is estimated that the difficulty of the increase will be high, with a maximum short-term increase of $1500.
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