Freight rates continue to decline across the board! The West Coast of the United States has become a severely affected area

Affected by the increase in transportation capacity, the Shanghai export container freight rate index has fallen for two consecutive weeks, and the European and American ocean routes have all declined, especially the significant decline in the US Western route. Industry insiders believe that the rebound in freight rates is related to the increase in transportation capacity, and it is expected that freight rates will continue to decline next week but the decline will narrow. At the same time, the delivery volume of new ships increased significantly in the first half of the year, and there will be more capacity deliveries in the second half, intensifying market competition.

Due to the significant impact of new transportation capacity, the latest Shanghai Export Freight Index (SCFI) released on the 19th fell by 3.6% to 3542.44 points, marking two consecutive weeks of decline and an expansion of the decline. The four major ocean shipping routes in Europe and America have all experienced a decline of over 1%. Of particular note is that the US West Coast, one of the approximately 10 newly added or restored eastbound trans Pacific routes, has been particularly affected, with a weekly decline of 6.92%, indicating a significant decline.

International logistics industry insiders have analyzed that after a period of rapid increase in freight rates, there will naturally be a phenomenon of correction and correction. The Red Sea crisis and the expiration of labor contracts on the US East Coast at the end of the year are still important factors affecting the market. In addition, some shipping companies have chosen to allocate small vessels to the US West Coast route to compete for cargo sources, which further increases the supply of transportation capacity and has had a significant impact on the freight rate performance in the past two weeks.

The senior management of freight forwarding companies and shipping companies also revealed that with the increase of overtime shipments and the continuous launch of new routes, the freight rates of the US West route have fallen from the highest point of 00 on July 1st to the current range of 00-6900. At the same time, the freight rates on the US East Coast route have also dropped from a peak of 400 to approximately 00. It is expected that the market freight rates will continue to decline next week, but the decline will narrow slightly.

According to Alphaliner's statistics, a total of 271 new ships were delivered globally in the first half of the year, with a total capacity of 1.68 million TEUs. The second quarter was the peak period for ship deliveries, with an average monthly delivery of 315000 TEUs. As of now, the total global transportation capacity has reached 30.266 million TEUs, continuously setting a new historical high. It is expected that there will be 1.49 million TEUs of new capacity delivered in the second half of the year.

Industry insiders in the freight forwarding industry emphasize that the high freight rates on European and American routes have attracted a large number of overtime ships to enter the market, as well as the launch of new route services to compete for cargo sources, which are the main reasons for the decline in freight rates. Among them, due to the high turnover rate of ships, the US West Coast route has become a disaster area, and the spot market price has dropped to around 6 yuan, with a cumulative decline of over 1000 US dollars.