International News

Freight Rates On U.S. Eastbound Routes Drop

Author : Bozhou Marine

Update time : 2022-01-28 11:25:20

Now that the Spring Festival is approaching, the work of various industries in China is entering the year-end closing stage. Although there have been many epidemics in various parts of the country recently, it is fortunate that there are strict prevention and control measures in various places, and the enthusiasm for returning home is quietly increasing.

Logistics trucks and tow truck drivers are no exception. They are in the port all year round, and it is rare to be reunited with their families. Therefore, most drivers choose to end their work early and go home for the Chinese New Year.

Due to the early completion of logistics vehicles and trailers, many freight forwarders and shipping companies have also cut orders in advance and entered the final stage.

Freight rates have fallen for two consecutive weeks, with the largest decline in the eastern line of the United States

With the Spring Festival holiday approaching, the volume of Asian exports decreased, and the Shanghai Export Containerized Freight Index (SCFI) fell for two consecutive weeks.

According to the latest data released by the Shanghai Stock Exchange on January 21, the SCFI index ended last week rising for nine consecutive weeks and set a new record for six consecutive weeks. For the first time, the freight rates of major routes such as the US-West Route, the European Route and the Southeast Asia Route have been jointly revised down for the first time.

Among them, the Far East to the eastern line of the United States has the largest decline, with the freight rate falling 3.34% to $11,337/FEU for the week; the western line of the United States dropped slightly 0.23% to $7,976/FEU.

In contrast, the performance of the European route was relatively stable. The freight rate of the Far East to Mediterranean route increased by 0.03% to US$7,522/TEU, and the freight rate of the Far East to Europe route decreased by 0.18% to US$7,783/TEU.

The near-ocean line maintained a mixed trend. The freight rate of the Far East to Japan Kansai line increased by 23 US dollars compared with the previous week, the Far East to Japan Kanto line fell by 7 US dollars compared with the previous week, and the Far East to Southeast Asia route to Singapore fell by 13 US dollars compared with the previous week. The line to Korea was down $7 from the previous week.

Industry analysts said that it is impossible for freight rates to remain high all the time. As the Chinese Spring Festival holiday approaches, demand decreases, and the decline in freight rates reflects market demand. Such a pullback trend is normal.

Whether the market re_verses downward or not, the rate of decline in future freight rates is an important indicator to observe, as long as it is not a collapse trend, don't worry too much.

According to a person in the freight forwarding industry, the transaction price of both the trans-Pacific route and the European route remains at a high level. China will start production in the next two weeks of the year, and it is expected that the freight rate will continue to adjust.

However, in the next February and March, the US-West docker contract will start negotiations. According to past practice, if the negotiation fails, it may lead to sabotage or even strikes. The cargo owners will pull the goods in advance, which will push up the demand for transportation capacity in the first quarter and support the high freight rate. High freight rates are expected to remain at least until the second or third quarter.

612 ships in the world are congested, and the problem is still serious

According to the latest data in Seaexplorer, 612 container ships are currently anchored or cruising near major ports around the world.

Congestion in the ports of Los Angeles and Long Beach has not eased. The latest figures show there are 103 more ships waiting to berth. The problem of long waiting time for cargo ships at the port is still serious, and the cargo is still piled up before the Spring Festival.

Affected by the new coronavirus Omicron variant, the number of port workers has decreased. Congestion is serious, and the ports of Los Angeles and Long Beach continue to postpone the implementation of container detention charges. The congestion may not be relieved after the year, so everyone should be mentally prepared in advance.

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