Tariff effect expands! Container freight rates fall for 9 consecutive weeks
The effect of the US tariff increase expanded, and the Shanghai container export Freight rate index (SCFI) fell for nine consecutive weeks.
According to the latest data released by the Shanghai HNA Exchange on March 14, the SCFI index fell 116.96 points to 1,319.34 points last week, a weekly decline of 8.14%. The four major ocean routes in Europe and the United States all fell, especially the European line due to large ships and insufficient cargo, resulting in a sharp decline in freight rates.
Last week, the FEU for the Far East to the West fell by $326 to $1,965, a weekly decline of 14.23 per cent; FEU freight on the Far East to the United States East line fell by $352 to $2,977, a weekly decline of 10.57%; Far East to Europe freight fell $240 per TEU to $1,342, a weekly decline of 15.17%; The Far East to Mediterranean line fell by $222 per TEU to $2,295, a weekly decline of 8.82%.
On the oceanic line, the freight rate per TEU from the Far East to Kansai, Japan was unchanged from the previous week, at $304; Far East to Japan Kanto freight per TEU unchanged from the previous week at $308; Freight rates from the Far East to Southeast Asia increased by $7 to $446 per TEU compared to the previous week; As far away as South Korea, the freight rate per TEU was unchanged from the previous week at $137.
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Industry insiders pointed out that although a number of container shipping companies plan to raise freight rates in early April, including the US line plans to increase by $1,000, the European line plans to increase by $2,000, but the market reaction is mixed. Mediterranean Line was the first to announce that the European line will be quoted at the end of March in the first week of April, a move that could weaken the momentum of other container lines, and the market is watching closely to see if other companies will follow suit.
At present, the container market is in the off-season, and after the effect of avoiding the export of tariffs has subsided before, the market has shown a situation of less goods and more ships. In addition, the Sino-US trade friction has escalated, and the negotiations between the two countries have made slow progress, and the mood is strong. In order to increase the loading rate, the consolidation companies have adopted the strategy of price reduction, which has led to the intensification of the tariff war.
After US President Donald Trump took office, two successive waves of 10% tariffs on China have pushed the average tariff quickly to 35%, making shippers more cautious about shipping. According to Chinese customs statistics, dollar-denominated exports rose just 2.3 per cent in the first two months of the year from a year earlier, well below half market expectations and the slowest growth since April last year.
If the subsequent negotiations between China and the United States are not smooth, Trump may further impose tariffs, which will increase the uncertainty of exports, and then have a negative impact on the volume of goods and freight.
However, some analysts believe the impact of the tariffs could be short-term. As the trade war continues, the market has entered a period of observation, and the cargo owner is cautious about shipping, and the cargo volume has been affected. However, once the trade war situation becomes clear and the market enters an adaptation period, US retailers may begin to restock or make seasonal purchases, and the volume of goods is expected to gradually recover.
The industry pointed out that the key lies in when the volume of Asian exports to Europe and the United States will recover, and it is expected that the volume of goods is expected to pick up from April, when the freight rate will begin to stabilize.
