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Freight rates continued to fall, with the US West Route plummeting 23%

Time:2022-09-06 Publisher:Kevin Num:2938

Affected by weak global demand and sluggish economic prospects, the freight rates of major routes in the market have continued to decline.

The latest Shanghai container freight index (SCFI) was 2847.62 points, down 306.64 points from the previous period,

The drop was 9.7%, the largest weekly drop since the epidemic, and it has fallen for 12 consecutive weeks.

Shanghai export container comprehensive freight index (SCFI), Ningbo export container freight index (NCFI), global container freight index freightos Baltic indices (FBX) and other important industry indexes all show that spot market freight rates are falling significantly.

On September 2, the SCFI released by the Shanghai Shipping Exchange was 2847.62 points, down 306.64 points or 9.7% from the previous period. This is the second consecutive week of sharp decline in SCFI, with a decline of 8.0% last week.

What is particularly noteworthy is that on September 2, the market freight rate of Shanghai port exports to the western basic port of the United States fell to 3959 USD/ FEU, a sharp drop of 23% compared with a week ago.

Analysts of Shanghai Shipping Exchange believe that at present, because inflation continues to be high, the Federal Reserve is forced to continue to take measures such as raising interest rates and shrinking tables to curb inflation, and the US economic situation is likely to deteriorate further in the future.

The growth of transportation demand in the US market is weak, and the fundamentals of supply and demand are relatively weak, resulting in a sharp drop in the freight rate of the US west route.

On the other hand, the NCFI released by Ningbo Shipping Exchange also showed a similar trend.

On September 2, NCFI closed at 2160.6 points, down 240 points or 10% from last week. Among them, the US west route freight index was 2245.8 points, with a double-digit decline of 16.3%.

NCFI also specifically mentioned that there is a large gap in freight demand for the current China Thailand Vietnam route, and the booking price in the spot market has dropped significantly, and even a small number of "zero freight" and "negative freight" have appeared. The route's freight index fell by 37.1% in a week.

In contrast, the FBX jointly released by the Baltic Air Transport Exchange and freightos fell only slightly. On September 2, the index was $5426 / feu, down 4.8% from last week.

SCFI dropped from 5109.60  to 2847.62, a decrease of 44.2%; NCFI fell from 4233.2 to 2160.6, a decrease of 48.9%; FBX fell by 40.8% from $9167 / FEU to $5426 / FEU.

In response to the drop in freight rates, Rodolphe Saad é, CEO of Delta Airlines, recently analyzed that: "it is expected that this downward trend will continue in the future. However, freight rates will not fall significantly, but will decline slowly."

Earlier, Walmart and target, the two major US retail giants, announced that they would cancel a large number of orders.

Due to the pressure of high inflation and the excessive inventory replenishment earlier this year, the supply chain of American retailers is facing great challenges.

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