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There's a $1 shipping charge on this route! Shipping company reported: January rate increase of $1000

2022-12-21 09:57

The container shipping market is expected to recover as more shipping companies step up efforts to control capacity and rate declines continue to narrow.

The SCFI fell for the 26th straight week

According to the latest data released by the Shanghai HNA Exchange, the Shanghai Container Freight Index (SCFI) fell 14.8 points to 1123.29 last week. Although the SCFI index fell for the 26th consecutive week, the decline further narrowed from 2.84 per cent the previous week to just 1.3 per cent, indicating that the shipping market has bottomed out.

Rates for the Far East to Europe have recovered, rising $3 per TEU, or 0.2 per cent, to $1,050 last week. The Far East to Mediterranean line increased for the second week in a row, adding US $10 per TEU, or 0.5%, to US $1,851.

Meanwhile, signs of stabilization also began to appear on the Western route, with rates on the Far East-West route falling $7 per FEU to $1,423, maintaining the weekly decline of 0.49 percent from the previous week. Only the Eastbound line remained down sharply, with FEU rates on the Far East line falling $121, or 3.67%, to $3,169, though still down from 4.28% the previous week.

In Asia, the Far East to Kansai and Kanto rose by $10 per FEU to $331 and $334 respectively, while the Singapore line fell by $11 to $205 and the Busan line in South Korea dropped by $33 to $236.

A $1 freight to Southeast Asia

At present, the freight rate of the ocean line in the container market has gradually stabilized, while that of the Southeast Asia line is still falling, and that of the Vietnam line has returned to the "symbolic" rate of $1 before the epidemic in 2019.

According to the media in Taiwan, a large freight forwarding company pointed out that last week, the freight rate of 2019 before the epidemic has returned to the Vietnam route, and the symbolic sea freight for large containers (40 feet container) and small containers (20 feet container) is only $1.

Industry sources pointed out that the number of confirmed cases in mainland China after the lifting of the lockdown, the port faced a shortage of workers, it is estimated that it will take two months to see relief, and many workers have not returned home for three years in a row, this year, the release of the lockdown has decided to early in January holiday, will affect shipments, it is difficult to see a small peak season before the Spring Festival.

On the other hand, the container ships previously transferred from China's domestic line to Vietnam and Thailand have not been withdrawn. Due to overcapacity, the Vietnam line was charged a nominal rate of $1 per FEU and TEU last week.

At the same time, the shipping rate of Thailand has also dropped significantly. The original shipping rate of 200 US dollars per container was 143 US dollars announced by the Shanghai Shipping Exchange last week. This week, some shipping companies in the Taiwan market of China charged only 50 US dollars, indicating that the problem of excess shipping space has become increasingly obvious.

On December 31 last year, the Shanghai Airlines Exchange's Southeast Asia Container Freight Index (SEAFI) reached 8,063.98 points, when rates at Ho Chi Minh in Vietnam reached $1,424 per TEU and at Lim Chabang in Thailand reached $1,469 per TEU. Today, the SEAFI index has fallen as much as 90.02 per cent to just 804.60 points, and the Vietnam line is only $98 per TEU and the Thailand line is only $115.

Shipping company reports to FMC: Rate increase of $1000 in January

In addition, in order to welcome the small peak season before the Spring Festival, some container lines have introduced the strategy of raising freight rates from January 1. The American line shippers reported to the United States Federal Maritime Commission (FMC) that each large container (40 feet container) in the West and East of the United States would increase by $1,000, and the inland would increase by $2,000.

But large freight forwarder companies think it is very difficult to raise prices, some freight forwarder companies estimate that it can rise 100, 200 is good; For the European route, the forecast may be a real increase of $50.

The current Lunar New Year is about a month away, industry insiders pointed out that in previous years, six weeks before the Spring Festival shippers began to rush to book shipping space, this year did not see the situation, if the freight rate can increase, mainly rely on shipping companies to cut shifts. Freight forwarders find it difficult to raise prices because only a few flights will be full and most will remain underloaded.

However, the original weekly flights are now operated every other week. Freight forwarders need to fully grasp the schedule reduction situation, otherwise they will have to wait two weeks for smooth shipment. Shipping companies are also worried about letting customers delay the shipment for two weeks, so as to avoid overcharging, so as not to offend customers.

At present, shipping companies cut about 30 percent of their flights. Industry insiders believe that unless there are further cuts in flights, there will be at most a small increase of 50 or 100 years before the first year, and then immediately fall back, and there is still no need to expect the first quarter of next year.

American line companies have to report their freight rates to FMC, so they all adopt the strategy of high quotation, so as not to miss the opportunity of price increase when the freight rates may rise sharply for some special factors. Other lines inform customers a month in advance according to the price increase regulations of various countries.