The latest Drury general freight index rose 1 per cent month-on-month for the first time since February. During the period, freight rates on Asia-Europe and Mediterranean routes increased by 2% and 3%, respectively, for the second consecutive week, while trans-Pacific and trans-Atlantic routes remained stable month-on-month.
As the Houthis continue to carry out attacks in the Red Sea region, the container shipping market has been adjusted to avoid the Red Sea around the Cape of Good Hope. Although this adjustment has alleviated the initial crisis of backlogs and congestion to some extent, the ongoing adjustment of operational methods has brought some disruption. Given the situation in the Red Sea and the ongoing geopolitical situation in the Middle East, freight rates are expected to remain high. Mr Delury predicts further price rises in mid-May.
At present, the European and American lines of the consolidation industry successfully achieved this big price increase on May 1, and the shipping company has notified that it will raise the freight rate again on May 15, and it is expected that each large box will rise by about $1,000. The price increase makes the European route freight rate close to the $5,000 mark, while the US-West route is expected to break through $5,000.
The main reason why shipping companies dare to intensively push up freight rates is that the number of empty classes in the industry during the May Day holiday is too large, resulting in imported goods and empty containers can not be delivered to Asia in time, resulting in a serious shortage of containers. It is predicted that starting from the third week of this month, flights will gradually return to normal, but due to the backlog of goods in the early stage, it is expected that freight forwarders in the middle of this month will be effectively implemented.
At present, the freight rate of the US-West route is maintained at the level of about $4,100-4,200 per large box, while the freight rate of the US-East route is between $5,200-5,600. This year's May Day holiday is not as light as in previous years, the volume of goods has increased, but due to the lack of flights, resulting in the first half of May cabin full. The third week also needs to clear the backlog of cargo, it is expected that if you want to see market freight fluctuations and freight prices fall, you may need to wait until the fourth week or even next month.
In view of the large price increases of shipping companies, some freight forwarders expect that some long-contract direct passengers may complain to the United States Federal Maritime Commission (FMC) because they cannot obtain shipping space. However, similar to the large number of complaints during the outbreak, such complaints may not provide a quick solution to the current problem. Shipping companies may cite an unexpected increase in arrivals to show that they did not intentionally cut flights.
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