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Freight rates continue to rise! South America, West Africa, and South Africa soared by more than 2 percent, and the United States East and West rose by another 1 percent

2024-05-20 10:05

      Global shipping continued to perform strongly, and the freight rate of all routes rose, pushing the latest Shanghai Container Freight Index (SCFI) up 214.97 points to 2520.76 points, an increase of 9.32%; It has risen for six consecutive weeks and hit its highest point since mid-September 2022 (nearly 20 months).
      Specifically, the freight rates on the European and Mediterranean routes increased by 6.31% and 1.07% respectively, while the increases on the West and East US routes were even more significant, with 14.39% and 8.34% respectively. The most ferocious increases were on routes to South America, South Africa and West Africa, where freight rates increased by 22.4%, 22.25% and 26.65% respectively.

Freight forwarding industry insiders have analyzed the current shipping market situation in depth and pointed out that the ship capacity has been affected by geopolitical tensions in the Middle East and ship detours (nearly 3,400 ships have been forced to change routes so far), resulting in a decline in the turnover rate. Initially, ships tend to choose high-rate routes, but this crowding out effect has led to higher rates on other routes. At the same time, shipments in Europe and the United States exceeded expectations, in addition to the need to replenish inventory, geopolitical and other uncertainties may also prompt customers to increase safety stock levels and ship ahead of schedule, which together contributed to the increase in freight rates.

On the other hand, the recent market focus also includes the strike of Canadian rail workers. The Canadian National Railway and the Canadian Pacific Kansas City Railway Company failed to reach a new contract agreement, and the drivers' association of nearly 10,000 employees voted in favor of the strike, which is expected to take action as soon as the 22nd, which will be the largest strike in Canadian history.

Freight forwarding industry insiders roughly estimate that although the volume of Canadian cargo is not large, the strike may affect goods imported and exported to the United States through IPI, RIPI and other rail lines. Some of the cargo may be diverted to import ports in the southwestern and eastern United States, which will increase the pressure on transportation. In response to this change, shipping lines, including Maersk, have notified that they will optimize North American West Coast ports, using the Port of Tacoma as a temporary port of call for U.S. import and export railroads on the next four voyages to ease shipping pressure.

The impact of tensions in the Red Sea on global shipping trade is continuing to expand, and the current imbalance between supply and demand in the shipping market has led to a sharp rise in global freight rates. Among them, the price of European line shipping soared, and on May 16, the price of container shipping European line futures once rose to a high of 4321.9, once again hitting a new high since listing, and the highest increase of 218% during the year.

The person in charge of a large-scale freight forwarding company in the Yangtze River Delta said that a large number of containers are "wandering outside", and the current domestic port is seriously short of containers, and there is a "difficult to find a cabin" situation, and the space at the end of May is basically gone, and now there is only demand and no supply. A logistics company in Shenzhen said that the shortage of containers spread from Ningbo Port to Shanghai Port at the beginning, and now there is a shortage of supply in major ports.

The backlog of goods export is quite serious, which may affect follow-up orders. Industry insiders said that at present, the freight rate continues to rise, the current space is hard to find, the demand is too strong, the supply and demand are seriously imbalanced, coupled with the Red Sea crisis, port congestion and other problems, the freight rate may rise again.

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