The Sea Freight Rates Continue To Decline

a)

The latest Shanghai Container Freight Index (SCFI) was 3562.67 points, down 177.05 points from last week, hitting a new low since June last year, with a weekly drop of 4.73%, the ninth consecutive week of decline. The four major long-haul routes fell simultaneously, and the declines on the east and west routes of the United States increased.

Public data shows that different from the continuous rise of market freight rates after the end of March last year, the container freight rate entered the falling range again after the overall slight increase from the end of April to early June this year. below 5%.

According to a research report released by Huatai Securities, container transportation, as an important carrier of global trade, is directly affected by consumer demand in the European and American markets. Looking forward to the second half of the year and into 2023, the freight rate will maintain a downward trend, but it will still be higher than the pre-pandemic level.

Shanghai Export Container Freight Index

b)

Drewry World Containerized Index (WCI):

The latest composite index was $5,956/FEU, down 3% for the week, marking the 24th consecutive weekly decline.

Among them, the spot freight rate from Shanghai to Genoa fell 10% from the previous week, or US$960, to US$8,779/FEU;

The spot freight rate from Shanghai to Los Angeles decreased by 2% to US$6,834/FEU;

Shanghai to New York is basically unchanged at $9,749/FEU;

Shanghai to Rotterdam fell 1% to $8,833/FEU.

c)

According to the latest report of the Ningbo Shipping Exchange, the Ningbo Export Container Freight Index (NCFI) fell by 4.7% compared with last week, and the freight indexes of 21 shipping routes all fell. Consumer purchasing demand for European routes was weak, and the market was oversupplied. North American routes were not prosperous during the peak season, and freight demand did not improve.

Hapag-Lloyd, the world's fifth-largest liner company, recently announced strong results for the first half of 2022 and forecast the outlook for container shipping: demand is slowing, spot freight rates will continue to fall, and the current very serious congestion will ease. . But demand has not collapsed.

In addition to the impact of demand and supply on freight rates, the business strategies of liner companies, the IMO carbon emission reduction requirements, and the supply chain layout of multinational companies will all bring more uncertainty to the shipping market

In addition, the congested ports overseas may deteriorate due to the recent frequent strikes, which may become a major supporting factor for the freight rate of some routes to maintain a high level or temporarily increase sharply.

However, considering that the global economic recession is expected to increase, as well as the improvement of ship operation efficiency, and the concentrated launch of new ships in the next two years, there is a risk that it is difficult to maintain high freight rates in the shipping industry in the medium and long term.