A number of companies have reduced their n and Spanish freight rates
A super-large freight forwarding company recently pointed out that the original July 1 implementation of the container shipping market price plan encounter uncertainties. Companies had planned to raise the price of a large container on the western route from $7,100-$7,500 to $8,100-$8,500, but industry giant Mediterranean shipping (MSC) unexpectedly kept the price unchanged at $7,500. The move quickly triggered a chain reaction, with other shipping companies following suit and cutting prices in response to market changes. By Friday, most had cut their rates below $7,900, while Maersk's latest price, posted on its website late on Friday, was $7,600.
Mediterranean shipping, whose market share of capacity has exceeded 20 per cent, is increasingly influential in the market. In mid-june, MSC was the first to announce a $2,000 rate hike for the eastern route, prompting other shipping companies that had planned to raise $1,000 to follow suit. However, on the n-western route, MSC cancelled the original plan to increase the price by US $1000, which directly affected the loading capacity and pricing strategy of other shipping companies.
The market then observed a $600 per LINE cut by the South Korean ship SM, followed by cuts of $200-$300 by COSCO, Orient overseas and Nippon. As of Friday, with the exception of one large shipping company, which was still offering $8,000, most had cut rates to below $7,900, with two even offering discounts of $7,500 for certain flights.
During the month of June, many shipping companies took positive measures to cope with market changes and demand growth. Mediterranean shipping has resumed the Mustang route between Asia and the us-west; Singapore SeaLeady launched a fast route between China and South Korea to the us-west Long Beach in mid-june; and COSCO shipping has not lagged behind, on June 24, SEA3 us-west opened a six-boat Knock Nevis with a capacity of 8533 TEU for cross-border e-commerce, via Kaohsiung, Xiamen, Yantian and Changtan ports.
Several freight forwarding companies pointed out that the price increase plan on July 1 has been put into effect for less than a week, and many shipping companies, such as senro merchant shipping, have lowered their freight rates on the western route of the United States, mainly because of the emergence of overtime ships and new routes, yangming Sea Meidong freight price increase halved, only up $1,000, whether other shipping companies follow up remains to be seen.
The Red Sea situation affects the shipping market
It is reported that by the Palestinian-israeli geopolitical side to spread the news of a new round of peace talks, the situation in Gaza may ease. Clearly, the Red Sea region's every move, affecting the shipping market changes. According to statistics, the Yemeni Houthis in June in the Red Sea and Gulf of Aden Region launched the largest number of 2024 attacks to date. Whether this can change the status quo of circumvention in the shipping market, many people in the industry remain on the sidelines. Earlier, on July 1, shipping giant Maersk said that the next few months will be challenging for shipping companies and businesses, the disruption of container traffic through the Red Sea is expected to continue into the third quarter of this year. This means that the high cost of international freight problems in the near future, it is difficult to see a solution in the next few months, some routes are likely to continue to increase freight rates.
According to the Shanghai International Shipping Research Center's July 22024 report on the second quarter of China's shipping boom, of the container shipping companies surveyed, some 57.89% said container freight rates would return to normal levels in the first quarter of 2025, while 15.79% said they would return to normal levels in September or October A further 10.53 per cent said rates would return to normal levels in December.
How to go after the shipping index
Recently, freight rates of leading shipping companies have diverged. A German futures analyst, che meichao, said that some shippers continue to raise spot booking rates, it raised prices to $5,280 per TEU and $9,560 per FEU in mid-to-late July, up about $500 from last week. Eva raised its mid-july price to $5,535 per TEU and $8,970 per FEU, with 20GP and 40GP increasing by $100 and $200 respectively. But other shipowners have cut rates, with Hapag-Lloyd cutting prices to $4,600 per TEU and $9,000 per FEU from $4,850 and $9,500 last week. Ocean networking fell to $6,553 per TEU and $8,508 per FEU from $7,589 and $9,803 last week. According to spot-end understanding, the current shipping division price increases with a certain degree of tentative, if the lower shipper acceptance fell significantly, then the current high freight price is difficult to maintain.
From the basic point of view, the combined market in June huotang reflects the good booking situation in early July, July is expected to have a certain degree of transportation demand protection. Congestion in transit ports has not improved significantly, with planned capacity from China to Europe expected to drop by more than 50,000 TEU this week, tightening supply will further exacerbate supply pressure, it is expected that there will still be some support for the freight rate after the increase. In addition, relative to supply, Guo mingyu, an analyst at Guotuanxin Futures, said that demand is often a fast variable in the market. According to the rule of previous years, June-august is the peak season for the European line, and considering the increase in the voyage after circumvention, this year, the European line may be ahead of the peak season. U. S. line peak season is relatively late because of the shorter flight, the current North n route demand has gradually entered the peak season. However, overall, the three-quarter routes will gradually enter the off-season trend, rates will peak after a fall. But given the recent rise in global trade protectionism, or will affect some shippers to increase safety stocks, or even“Rush” and other phenomena, the traditional low-peak season may be affected.
“With the current shipping market peak season and the ongoing replenishment cycle for the bottom of the European economy, short-term freight rates will still have some support until the tightness in supply improves. In the medium and long term, considering that the current round of European replenishment may be coming to an end, once the demand for advance payment is fully released, the market will be insufficient, then freight support will weaken, or there will be a periodic correction,” che said. The COFCO Futures analysis compares the difference between the historical peak of freight rates during the epidemic and current rates. The report said that while the outbreak was driven by real demand, port congestion was again driving freight rates, and that this year's high freight rates were triggered by the supply side, the Red Sea crisis has caused supply chain disruption and a large loss of capacity, and the demand side, although still hot against the background of the overall economic performance of Europe and the United States, has not risen as vigorously as during the epidemic, should use rational attitude to look at the European and n market demand during the peak season.
Article sources: China Logistics and Procurement Magazine, Maritime Network, China Times, brokerage China
