The freight rate on the US West Coast has dropped below the $2,000 defense line
The SCFI freight rate index released by the Shanghai Shipping Exchange has fallen for four consecutive weeks. The latest quote on the 4th shows that the index continued to fall by nearly 100 points, with a decline of 5.26%. In the past week, the freight rates on the US West Coast and US East Coast routes have dropped significantly, falling by 18.97% and 12.57% respectively. The cumulative declines in the US West Coast and the US East Coast over the past four weeks have reached 62.74% and 40.57% respectively. The Mediterranean line dropped by 3.89%. However, the European route rose slightly by 3.5% against the trend, with the freight rate per 20-foot container firmly holding the $2,000 mark.
Weak demand is the main reason for the sharp drop in freight rates on the US line. This week, the freight rate on the US West Coast route has dropped below the $2,000 defense line. Market sources say it is approaching the cost line of alliance vessels. Some non-alliance small vessels have begun to suffer losses, and vessels of shipping companies such as China United Shipping have been gradually withdrawn from the market. The freight rate on the Eastern Coast of the United States has also dropped below the $4,000 mark. To save the rate, shipping companies significantly reduced the number of flights on the trans-Pacific route in July.
Since the US line freight rates have been falling sharply for four consecutive weeks, according to the SCFI freight rate index reported by the Shanghai Shipping Exchange on the 4th, the cumulative decline in the US West Coast has reached 62.74%, and the cumulative decline in the US East Coast is 40.57%. In addition, the new US tariffs will come into effect on August 1st, adding new uncertainties to the market and triggering a debate between bulls and bears.
US President Trump said on the 4th that he would issue a notice letter starting from that day to set unilateral tariff rates. The tariff rates for various countries range from 10% to 70%, and they will officially take effect on August 1st. The shipping company emphasized that it will continue to monitor the extent of the increase in the substantive tariff rates of various countries compared to the final tariff agreements before the tariff war, as well as the impact of this increase on import prices, the economy and the volume of goods exported to the United States. Both the vessel and the cargo are closely monitoring the tariff rates of various countries announced by the United States starting from the 4th. Following Vietnam, Cambodia announced on the 4th that it had reached a tariff trade agreement with the United States.
Shipping companies such as Yang Ming have all stated that they need to continuously monitor the extent of the increase in the substantive tariff rates under the final tariff agreements of various countries and their impact on import prices, the economy, and the volume of goods exported to the United States. Freight forwarders believe that to comprehensively assess the market situation, it is necessary to wait for the final outcome of the tariffs between China and the United States, the formulation of tariffs on the top ten countries in which the United States conducts trade, as well as the detailed rules and definitions of additional transshipment clauses to prevent "origin washing" to be clarified before it can be carried out. It is expected that the overall situation of the United States' procurement from Asia will not change much, but there may be a large-scale shift in the supply chain.
The volume of cargo on the European route remains stable, and freight rates are temporarily supported
Industry insiders revealed that the cargo volume on the European route has been stable. Shipping companies have controlled the space available, and some ports have experienced congestion due to water shortages. The berthing time of ships is about 5 days to 1 week, which to some extent has supported freight rates. Maersk and other shipping companies' European route opening quotations for next week will remain the same as this week, maintaining at around $2,900 per 40-foot container.
Freight forwarder industry insiders said that since the 4th, spot market quotations have shown that the freight rate for the US West Coast is approximately $1,900 - $2,050 per FEU, for the US East Coast it is about $3,700 - $4,100 per FEU, and for the European route it is around $2,900 - $3,600 per FEU. It is estimated that the cost of a US West Coast Alliance vessel is approximately $1,700 to $1,800, varying depending on the size of the vessel type. Moreover, the cost price of most alliance vessels exceeds $2,000.
To save freight rates, shipping companies significantly reduced flights in July. Data released by Dreury shows that over the next five weeks starting this week, about 7%, or approximately 48 flights, will be cancelled on major east-west routes, with 46% on the trans-Pacific East route. Flights from Asia to North America will be significantly reduced by 22.
The latest SCFI freight rate on July 4th
The freight rate from Shanghai to Europe is 2,101 US dollars per TEU, up 71 US dollars, with a weekly increase of 3.5%.
The freight rate from Shanghai to the Mediterranean is $2,869 per TEU, down $116, with a weekly decline of 3.89%.
The freight rate from Shanghai to the West Coast of the United States is $2,089 per FEU, down $489, with a weekly decline of 18.97%.
The freight rate from Shanghai to the Eastern United States is $4,124 per FEU, down $593, representing a weekly decline of 12.57%.
The freight rate per container on the Persian Gulf route is $1,916, down $144, with a weekly decline of 7.0%.
The freight rate per container on the Australia-New Zealand route is 853 US dollars, an increase of 17 US dollars, or 2.0%.
The freight rate for the South American route (Santos) is $6,374 per container, an increase of $154, or 2.5%.
In terms of near-sea routes, the price per TEU from the Far East to Southeast Asia dropped by 3 US dollars compared to the previous week, a decline of 0.66%. The TEU from the Far East to Kansai, Japan, from the Far East to Kanto, Japan, and from the Far East to South Korea remained the same as the previous period.
Weak demand is the main reason for the sharp drop in freight rates on the US line. This week, the freight rate on the US West Coast route has dropped below the $2,000 defense line. Market sources say it is approaching the cost line of alliance vessels. Some non-alliance small vessels have begun to suffer losses, and vessels of shipping companies such as China United Shipping have been gradually withdrawn from the market. The freight rate on the Eastern Coast of the United States has also dropped below the $4,000 mark. To save the rate, shipping companies significantly reduced the number of flights on the trans-Pacific route in July.
Since the US line freight rates have been falling sharply for four consecutive weeks, according to the SCFI freight rate index reported by the Shanghai Shipping Exchange on the 4th, the cumulative decline in the US West Coast has reached 62.74%, and the cumulative decline in the US East Coast is 40.57%. In addition, the new US tariffs will come into effect on August 1st, adding new uncertainties to the market and triggering a debate between bulls and bears.
US President Trump said on the 4th that he would issue a notice letter starting from that day to set unilateral tariff rates. The tariff rates for various countries range from 10% to 70%, and they will officially take effect on August 1st. The shipping company emphasized that it will continue to monitor the extent of the increase in the substantive tariff rates of various countries compared to the final tariff agreements before the tariff war, as well as the impact of this increase on import prices, the economy and the volume of goods exported to the United States. Both the vessel and the cargo are closely monitoring the tariff rates of various countries announced by the United States starting from the 4th. Following Vietnam, Cambodia announced on the 4th that it had reached a tariff trade agreement with the United States.
Shipping companies such as Yang Ming have all stated that they need to continuously monitor the extent of the increase in the substantive tariff rates under the final tariff agreements of various countries and their impact on import prices, the economy, and the volume of goods exported to the United States. Freight forwarders believe that to comprehensively assess the market situation, it is necessary to wait for the final outcome of the tariffs between China and the United States, the formulation of tariffs on the top ten countries in which the United States conducts trade, as well as the detailed rules and definitions of additional transshipment clauses to prevent "origin washing" to be clarified before it can be carried out. It is expected that the overall situation of the United States' procurement from Asia will not change much, but there may be a large-scale shift in the supply chain.
The volume of cargo on the European route remains stable, and freight rates are temporarily supported
Industry insiders revealed that the cargo volume on the European route has been stable. Shipping companies have controlled the space available, and some ports have experienced congestion due to water shortages. The berthing time of ships is about 5 days to 1 week, which to some extent has supported freight rates. Maersk and other shipping companies' European route opening quotations for next week will remain the same as this week, maintaining at around $2,900 per 40-foot container.
Freight forwarder industry insiders said that since the 4th, spot market quotations have shown that the freight rate for the US West Coast is approximately $1,900 - $2,050 per FEU, for the US East Coast it is about $3,700 - $4,100 per FEU, and for the European route it is around $2,900 - $3,600 per FEU. It is estimated that the cost of a US West Coast Alliance vessel is approximately $1,700 to $1,800, varying depending on the size of the vessel type. Moreover, the cost price of most alliance vessels exceeds $2,000.
To save freight rates, shipping companies significantly reduced flights in July. Data released by Dreury shows that over the next five weeks starting this week, about 7%, or approximately 48 flights, will be cancelled on major east-west routes, with 46% on the trans-Pacific East route. Flights from Asia to North America will be significantly reduced by 22.
The latest SCFI freight rate on July 4th
The freight rate from Shanghai to Europe is 2,101 US dollars per TEU, up 71 US dollars, with a weekly increase of 3.5%.
The freight rate from Shanghai to the Mediterranean is $2,869 per TEU, down $116, with a weekly decline of 3.89%.
The freight rate from Shanghai to the West Coast of the United States is $2,089 per FEU, down $489, with a weekly decline of 18.97%.
The freight rate from Shanghai to the Eastern United States is $4,124 per FEU, down $593, representing a weekly decline of 12.57%.
The freight rate per container on the Persian Gulf route is $1,916, down $144, with a weekly decline of 7.0%.
The freight rate per container on the Australia-New Zealand route is 853 US dollars, an increase of 17 US dollars, or 2.0%.
The freight rate for the South American route (Santos) is $6,374 per container, an increase of $154, or 2.5%.
In terms of near-sea routes, the price per TEU from the Far East to Southeast Asia dropped by 3 US dollars compared to the previous week, a decline of 0.66%. The TEU from the Far East to Kansai, Japan, from the Far East to Kanto, Japan, and from the Far East to South Korea remained the same as the previous period.
