The suspension period of tariffs between the United States and China has been extended by another 90 days, yet the volume of goods exported to North America remains sluggish. The Shanghai Containerized Export (SCFI) freight index, newly released on the 15th, has fallen for the tenth consecutive week. The index dropped 29.49 points to 1,460.19 points, with a weekly decline of 1.97%. Freight rates on all four major routes have declined. Specifically, freight rates to the West Coast and East Coast of the United States continued to decline by 3.51% and 2.61% respectively. Due to the summer vacation effect, freight rates on the European and Mediterranean routes have also continued to decline, with drops of 7.19% and 1.68% respectively.

Due to the fact that the volume of cargo on the US route in August decreased by more than 20% compared with the previous month, even though container shipping companies have taken measures to reduce and merge schedules, two alliance and non-alliance shipping companies still offered a special freight rate of $1,550 per large container (West Coast of the US) on the 15th. This price is lower than the cost price of $1,700 offered by most shipping companies. The freight rate to the Eastern United States has dropped from $2,700 to $2,550 - $2,600. The freight rate for the European route has dropped from $2,700 to $2,600.

Shipping industry insiders say that the extension of the tariff suspension period between China and the United States may prevent manufacturers from waiting and seeing the shipment situation from deteriorating further, and the market cargo volume may increase. However, due to the large amount of inventory accumulated in the early stage, the increase is expected to be limited.
●  The volume of goods from the West Coast of the United States is average. In the second half of August, the freight rate for a 40-foot container is approximately $1,600 to $1,700, with special offers as low as $1,500 to $1,550.
●  The freight performance in the eastern United States is not satisfactory, and the freight rate per 40-foot container has been reduced to $2,700 - $2,800.
●  Although the European route is affected by the port of Serbia, it is still summer vacation. Currently, the freight rate per 40-foot container is approximately 2,600 to 2,700 US dollars. However, within the freight forwarding industry, it was revealed that shipping companies such as ONE and HMM have lowered their freight rates for late August, quoting them to around $2,500 to $2,550, and even offering even lower special deals to secure shipments.

The shipping company said that after employees return to work in September, the market situation may have the opportunity to improve. At present, the freight rates on the US West Coast are fluctuating at a low level and are approaching the cost price. If they fall further, they will break through the bottom line. Shipping companies are reluctant to operate at a loss. If the cargo volume does not recover, they will surely increase the control of cargo space.

With the U.S. tariff policy roughly determined, the industry indicates that importers and exporters will negotiate the proportion of tariff sharing, comprehensively considering factors such as production costs, tariff costs, and transportation costs, and select the best shipping location. The tariff effect has led to higher product prices this year than in previous years. Importers also need to observe consumer acceptance to formulate shipping plans. As for freight rates, they are currently determined by the supply side. If shipping companies control the space properly, freight rates are expected to be supported.

The global container shipping market did not show the peak season effect in August. Shipping giant MSC (Mediterranean Shipping Company) has already reported that it will reduce the frequency of its Far East - North America route in September. Other shipping companies have also begun to assess the possibility of following suit and reducing frequency in September. Logistics industry insiders analyze that as the effect of reduced schedules gradually emerges, coupled with the approaching shipping rush before the Christmas and New Year holidays, the effect of delayed cargo volume is expected. In September, shipping companies may notify the addition of GRI charges.

The latest SCFI freight rate on August 15th:

●  The freight rate from Shanghai to Europe is 1,820 US dollars per TEU, down 141 US dollars, or 7.19%.
●  The freight rate from Shanghai to the Mediterranean is $2,279 per TEU, down $39, with a weekly decline of 1.68%.
●  The freight rate from Shanghai to the West Coast of the United States is $1,759 per FEU, down $64, with a weekly decline of 3.51%.
●  The freight rate from Shanghai to the Eastern United States is $2,719 per FEU, down $73, with a weekly decline of 2.61%.
●  The freight rate per container on the Persian Gulf route is $1,381, an increase of $148, representing a growth of 12.0%.
●  The freight rate for the South American route (Santos) is $3,340 per container, a decrease of $471, representing a weekly decline of 12.36%.

In terms of the near-sea route, the price per TEU from the Far East to Southeast Asia was 406 US dollars, a decrease of 3 US dollars compared to the previous week, representing a decline of 0.73%. The price per TEU from the Far East to Kansai, Japan remained unchanged compared to the previous week, while it rose by 2 US dollars. The price per TEU from the Far East to Kanto, Japan, also increased by 2 US dollars compared to the previous week.