According to industry sources, the world's major shipping companies, including COSCO Shipping (COSCO), China HNA Shipping (MSC), CMA CGM, Evergreen and Japan Ocean Network Shipping (ONE), are planning to raise freight rates on their West and East coast routes in the United States from August 15. It is expected to rise between 9% and 15%.
It is said that the specific situation is that several large container ship companies have notified customers on August 15, the United States West, the United States East are going to rise $1,000, but Maersk online freight rates have not risen by the end of the month, non-shipping alliances have fallen to $4500-4600, price increases are quite difficult.
Despite the recent trend of the container shipping market, the most intuitive reflection is that the Shanghai Container export Freight Index (SCFI) declined for four consecutive weeks, with a monthly correction of 10%, and the latest week fell by 3.3% to 3332.67 points.
In particular, rates on the Far East to West America route fell sharply by 6.3% to $6,425 /FEU, making it the biggest decline among the four indexes, mainly due to increased competition from the influx of smaller vessels into the market. Fares from the Far East to the Mediterranean, meanwhile, fell by 5.2 per cent to $4,997 /FEU, the second largest decline.
Despite the one-month correction in freight rates, the shipping market is still facing serious shortages of container sources and vessels, given that SCFI has risen for 13 consecutive weeks and is currently in the traditional peak season for global container shipping.
Freight rates on the Far East to Western America route have fluctuated wildly, partly because they are too high, which has attracted near-ocean operators to enter the competition with smaller ships, driving down rates.
In addition, the tension in the Middle East and the gradual increase in cargo volumes after mid-August are also important factors in the decision of the five major companies to increase freight rates.
However, it is worth noting that despite the price adjustment expectations, the current container shipping season is relatively stable, and the Panama Canal capacity is gradually returning to normal, is expected to be fully restored in September, which will drive the total capacity to reach 1.6 million TEU, which will further put pressure on freight rates.
It is difficult to raise freight rates, and the shipping company actively prepares for price increase plans
Major freight forwarding companies have different views on the trend of market freight rates, but generally pay attention to the impact of factors such as cargo volume, market demand and shipping company strategy on freight rates. Among them, two large freight forwarding companies clearly pointed out that due to the lack of goods, it is difficult to support the effective rise in freight rates. Another company is taking a wait-and-see approach, arguing that the success of price increases depends on how much cargo actually supports them: some shipping companies may be able to raise prices if they have sufficient supplies, but rates will fall quickly if ships fall short of their scheduled load rates.
Another freight forwarding company stressed that the current market demand warming speed is not enough to directly promote freight rate increases, unless there are unexpected events such as Canadian railway workers and port strikes in the United States East, otherwise freight rate increases will not be enough. The last freight forwarder sees both opportunity and risk in raising prices, and the big ship companies may try to increase freight rates by reducing the number of flights.
In addition, the current situation of the market shows that freight rates are still high, compared with last year, SCFI published August freight data show that the West line rose from 2002 US dollars to 6245 US dollars, the East line soared from 3013 US dollars to 9346 US dollars, an increase of more than three times, showing a very high level of profitability. However, shipping companies are concerned about the rapid decline in freight rates and are actively planning price increase strategies to slow the trend.
Recently, the United States East line freight rate has fallen significantly, industry analysis believes that this is mainly due to the Mediterranean shipping and CMA CGM shipping companies on the line increased overtime ship services, and launched a special price of 7,500 US dollars per large box, coupled with the Panama Canal capacity gradually improved, ship turnover rate accelerated, jointly increase the rate of decline.
In the face of this situation, European shipping companies are actively preparing for the price increase plan on August 15, its success is expected to become clear in the next few days. Asian shipping companies expressed a more firm attitude, stressing that even if the price increase was not successful on August 15, it will definitely achieve a freight rate increase on September 1 to cope with the current situation of rapid decline in freight rates.
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