The latest edition of the Shanghai Container export Freight Rate Index (SCFI) released shows that the freight rate index has fallen for six consecutive weeks, and the four major routes have shown a downward trend. Specifically, the index fell 163.74 points to 1,595.08, extending the decline to 9.3%. Among them, the freight rate of the Far East to the West of the United States fell 17.97% below the 3,000 US dollars mark, and the freight rate of the Far East to the East of the United States fell 18.05% also lost the 4,000 US dollars level.

The current SCFI quotation shows that the decline of Europe and the Mediterranean route has converged to single digits, while the decline of the United States West and East routes has expanded to 18%, becoming the hardest hit area. At present, the relative off-season after the lunar year, coupled with the policy changes of US President Trump, led to a wait-and-see attitude in market shipments, reducing the demand for containers exported from Asia to Europe and the United States, and then pulling down freight rates.

At the same time, the resumption of work after the Spring Festival is not as expected, which is also one of the reasons for the continuous decline of SCFI. Freight rates on not only the main routes but also the secondary routes showed a continuous decline (all routes fell), which disrupted the shipping companies' plans to raise prices in March. According to the market, Maersk has reduced the price of the European route in the first week of March to 2080 to 3200 US dollars (20 feet and 40 feet container), far lower than the initial shout target price of 2600 to 4000 US dollars, equivalent to a 20% discount before the rise.

In addition, in response to the decline in freight rates, global liner companies continued to implement schedule reduction measures in March. About 7% of flights on North American routes have been cancelled in the next five weeks. If the market demand is still not strong in March, we do not rule out further reduction of shifts to rationalize freight rates.

However, the industry also has an optimistic reminder that as long as the geopolitical problems in the Middle East are not solved, the tight supply and demand situation in the container market will continue, so we should not over-interpret the market rate changes in the off-season.

For the United States line, some freight forwarders in the industry believe that the Shouting situation is also not too optimistic. The easing of the crisis in the Red Sea could lead to a gradual resumption of shipping through the Suez Canal, freeing up more than 10% of excess capacity and thus affecting freight rates. It is expected that the full resumption of factory work after the holiday may have to wait until mid-March or the end of the month, when the resumption of shipments will become a key factor affecting the trend of freight rates; The overall market situation may not become clearer until next week, and the major shipping companies' plans to raise prices may be delayed until March 14.

It is worth noting that the European route has appeared "freight inverted" phenomenon, that is, the spot market freight price is lower than the contract price signed this year. Faced with the pressure of adjusting the contract price, the shipping company has adopted two strategies of increasing the reduction of shift control range and Shouting the freight rate in March to support the freight rate.

Freight forwarder industry sources revealed that after the Spring Festival, European and American shipping lines continued to fall, shipping companies are bound to support freight rates by Shouting up. Although the European line is bound to rise, how much it will rise depends on market supply and demand. More clarity may come next week. Maersk had taken the lead in cutting prices in the first week of March, but then raised its offer in the second week, showing its determination to stabilize prices.

SCFI Rates:
Shanghai to Europe freight 1578 US dollars /TEU, down 30 US dollars, down 1.86% week;
Shanghai to Mediterranean freight 2624 US dollars /TEU, down 191 US dollars, down 6.78% week;
Shanghai to the West of the United States freight 2,907 US dollars /FEU, down 637 US dollars, the week down 17.97%;
Shanghai to the United States East freight 3954 US dollars /FEU, down 871 US dollars, down 18.05% week;
Persian Gulf freight rate of $1,102 per box, down $42, weekly decline of 3.7%;
South American route (Santos) freight per box 2,947 US dollars, down 412 US dollars, week down 12.3%;
Southeast Asia route (Singapore) freight rate of 440 US dollars per box, down 17 US dollars, weekly decline of 3.7%.

Near the ocean line, the Far East to Japan's Kansai, the Far East Japan's Kanto; Far East to South Korea per TEU is unchanged from the previous phase.