The SCFI index has ended its continuous rise, and the trans Pacific route has entered a window of adjustment

The concentrated shipping market that has lasted for several months is gradually stabilizing, and the container shipping market has officially entered a phase of adjustment. The Shanghai Shipping Exchange has released the latest issue of the SCFI freight rate index, ending the previous ten week upward trend and ushering in two consecutive weeks of decline. The trend of major trunk routes has shown significant differentiation, with a prominent decline in freight rates in the western United States. The eastern United States route relies on canal navigation restrictions to maintain resilience, and foreign trade enterprises can flexibly plan booking arrangements based on cargo schedules.

On July 17th, the latest SCFI Composite Index was reported at 3080.31 points, with a slight decrease compared to the previous month. Since April this year, due to factors such as early stocking overseas and tight cabin space, the spot freight rates for ocean freight have experienced a continuous rise. With major shipping companies gradually deploying overtime vessels, the tight market capacity situation has been alleviated, and the concentrated shipping demand generated by tariff nodes in the early stage has gradually been released, and freight rates have begun to return to a rational range.

In this round of market adjustment, the trans Pacific US West route has experienced the most significant fluctuations. With the concentration of new transportation capacity entering the market, there has been a significant decrease in market freight rates within just one month, and spot prices have continued to decline. Market transaction data shows that the price of 40 foot containers in the western United States has been falling all the way from the high point in early July, and the current market bargaining space has further expanded, with short-term cabin supply tending to be loose.

In contrast to the West Coast, the freight rates on the East Coast route remain relatively stable. The core support comes from the continuous tightening of navigation control in the Panama Canal. The Canal Authority will gradually reduce the maximum allowable draft depth for ships, and the loading capacity of ships must be reduced for passage, directly compressing the effective capacity of a single ship. Combined with the recent reduction in navigation quotas due to ship lock maintenance, transportation costs continue to rise. Industry insiders predict that the effective transportation capacity to the East Coast via the Panama Canal in the fourth quarter may be significantly reduced, and the related impact will also be transmitted to South American routes.

The European shipping routes have followed the overall market correction, and the current market prices have fallen slightly from the high point in early July. There are significant differences in prices between different shipping companies and voyages, and shippers have more options for price comparison; The significant reduction in freight rates for South American routes; The trend of near ocean routes is relatively stable, with Southeast Asian freight rates basically unchanged, and slight fluctuations in Japan Korea routes.

Not only the domestic SCFI index, but also the Drewry WCI Global Container Freight Index has ended its continuous upward trend. The simultaneous decline of two major industry indices confirms that the upward momentum during this peak season has weakened. It needs to be objectively distinguished that this downward trend in freight rates is a stage correction after continuous increases, and the overall freight rate level is still higher than the same period at the beginning of the year, without a foundation for sustained deep decline.

Multiple shipping companies plan to implement a new round of fare increase plans from late July to early August. But with the continuous delivery of new shipbuilding and the gradual return of bypass route ships to the main routes, the market capacity supply continues to improve, and the driving force for the rapid rise of freight rates has weakened.

Looking ahead to the future, the demand for stocking up during the back to school season and year-end festivals in Europe and America in the third quarter will continue to be released, coupled with changes in the Panama Canal passage policy, adjustments in overseas trade related policies, and adjustments in shipping company capacity, which will still be key variables influencing the subsequent trend of freight rates.

Based on the current market situation, it is recommended that for orders with loose cabin environment and flexible delivery cycles in the US West direction, comparative pricing and booking can be made at the appropriate time; For shippers planning to ship to the East Coast of the United States, the long-term impact of canal restrictions on transportation capacity supply and uncertainty in shipping schedules suggest planning ahead and locking in cabin space; The price difference between various European routes is significant. Before shipment, a comprehensive comparison of timeliness and price is conducted to optimize logistics costs.

Xingmei Ship continuously tracks the changes in global main air routes' freight rates, shipping schedule dynamics, and overseas port policies, providing one-stop logistics services to help foreign trade enterprises grasp the market window and safely arrange goods for export.

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