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[Hongde Information] Freight rates enter winter! The suspension of flights around the Spring Festival surged, seven times as much as before the epidemic! The 158 voyages accounted for 80% of the three major alliances.
Jan 17,2023
Hongde International learned that the global freight index entered a cold winter period, and the container freight index fell again this week.
The new issue of Shanghai SCFI container freight index fell again, and the decline narrowed. The index reached 1031.42 points, a decrease of 2.88.
Near China's traditional Spring Festival holiday, China's export container transport market did not appear pre-holiday shipment peak, the transport market performance is relatively weak, most ocean routes market freight rates down.
According to analysis by industry insiders, the performance of freight rates will be distorted at present, because the mainland has begun to take annual leave, shipments have decreased in an all-round way, and major airlines have also begun to reduce shifts. Therefore, the current freight rates cannot reflect the general situation of the market, and whether the freight rates can rebound in late February is an important indicator of whether the market conditions are good or bad.
The industry is worried that the freight index has fallen to a breaking price and is already lower than the 2019 index, all of which are about to face a 1000-point defense.
According to the new issue of freight rates,European Route: Due to the slow recovery of transportation demand after New Year's Day, there was no small peak of shipments before the Spring Festival holiday, and the balance of supply and demand was not ideal, the freight rates in the European and local routes continued to adjust.
The freight rate from the Far East to Europe was 1020 US dollars/TEU, down 30 US dollars or 2.9 per cent from the previous week;
The freight rate from the Far East to the Mediterranean is 1836 US dollars/TEU, up 19 US dollars or 1.03 from the previous week;
However, due to the sharp reduction in the number of shipping companies on the European line, some ships have burst their cabins. Shippers have to add about US $200 per large box to buy cabins. At present, the in stock market freight rate is between US $1600 and US $1800 per large box.
US Line:With inflation still high, the economic outlook is not optimistic. Transportation demand is relatively weak, before the holiday also failed to appear a small peak of shipments, supply and demand fundamentals are not good, market freight rates continue to fall.
Far East to US $1378/FEU, down US $36 or 2.61 per cent from the previous week;
Far East to US $2825/FEU, down US $20 or 0.71 per cent from the previous week.
New data from Xeneta shows that shipping companies canceled more than seven times the number of flights on the Asia-to-US West Coast route ahead of the Chinese New Year compared to the same period in 2019, a clear indication that weak demand is weakening the container shipping industry.
Between the first week and the sixth week of the new year, the alliance has suspended about 1/3 of the routes from Asia to northern Europe and the Mediterranean.
However, the reduction in effective capacity was much higher given the postponement of voyages and the fact that some ships made a detour to the Cape of Good Hope on the return journey to save Suez Canal costs and slow the return to Asia. Due to the cancellation of consecutive flights, the concentrated cancellation of flights on some routes led to the suspension of services.
According to Alphaliner, the only remaining ship deployed by the 2M alliance on the "AE1/Shogun" loop, the 15413TEU "Maersk Cambridge" originally scheduled to depart from Ningbo on January 18, has been canceled.
Alphaliner said: "Unless there are continuous cancellations, in principle, the route should resume service on the 13000 TEU MSC Katie from Ningbo on February 15."
However, despite the withdrawal of "AE1/Shogun" and the cancellation of four consecutive voyages of the "AE55/Griffin" loop, Maersk and Mediterranean Line are still struggling to match supply and demand.
2M Alliance partners announced two more cancellations this month:
"MSC Rifaya" of 19462 TEUs for the "AE6/Lion" route from Ningbo on 19 January ";
and "Eugen Maersk" for 17816 TEUs on the "AE7/Condor" route from Ningbo on January 24 ".
In addition, many ships that did not cancel their voyages to northern Europe arrived at the first port of discharge with only 60 to 70 per cent full, eliminating the landside congestion that hampered the supply chain in the first half of last year. A British port contact said: "The only problem we have now is that the carriers have filled the yard with empty containers because they don't need to return them to Asia.
Insiders feedback, Asia-Europe routes in the near future "grim", the industry has never seen such a downturn in demand.
According to new data from Deluli, of a total of 700 scheduled voyages on major trade routes across the Pacific, Atlantic and Asia to Northern Europe and the Mediterranean, 158 voyages were canceled in the third week (January 16-22) to the seventh week (February 13-19), accounting for 23% of the cancellation rate.
During this period, 68% of the suspension occurred on the trans-Pacific eastbound route, 25% on the Asia to Northern Europe and the Mediterranean route, and 8% on the trans-Atlantic westbound trade route.
In the next five weeks, THE Alliance has announced the cancellation of up to 60 voyages, followed by Ocean Alliance and 2M Alliance with 36 and 27 voyages respectively. During the same period, non-shipping alliances imposed 35 suspensions.
Deluri said that the optimization of China's epidemic prevention and control policies is a good sign, but the surge in cases has once again weakened the supply chain and exacerbated congestion in large ports such as Shanghai, Ningbo and Qingdao.
Shippers and BCOs exporting from our country should expect more delays in the coming weeks as most carriers adjust their shipping schedule to avoid limited port and terminal operations during the upcoming Chinese holiday season.
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