After finally rebounding in the last week of 2022, container shipping freight rates fell sharply again in the first week of the new year. Facing the dual pressures of sluggish demand and growing capacity, the container shipping market may enter the “Great Recession” of continued decline in 2023.
Freight prices turn lower in first week
According to the latest data released by the Shanghai Shipping Exchange, the Shanghai Export Container Freight Index (SCFI) fell 46.41 points to 1061.14 points, turning from a slight increase of 0.04% in the last week of last year to a decline, and the decline expanded to 4.19%, exceeding market expectations, mainly In all ocean routes, except for the Mediterranean route, freight rates fell.
The latest route index:
The freight rate per TEU on the Far East to Europe line fell by US$28 to US$1,050, a weekly decrease of 2.5%.
The freight rate per TEU on the Far East to Mediterranean line increased by US$5 to US$1,855, a weekly increase of 0.27%.
The freight rate per FEU from the Far East to the US West fell by US$9 to US$1,414, a weekly decrease of 0.63%.
The freight rate per FEU from the Far East to the US East route fell by US$222 to US$2,845, a decrease of 7.2%.
In addition, due to weakening demand for ships, the Baltic Dry Index (BDI) plummeted 17.5% on January 3, the largest single-day decline since 1984. On January 11, it fell again by 4.84% to 1,043 points, the lowest level since September 1 last year.
Industry insiders believe that from the data point of view, regardless of the container shipping or bulk shipping market, the overall market trend in 2022 will be relatively weak. The sluggish overall demand for foreign trade is the main reason for the decline in global shipping market prices. The sluggish global shipping market and lack of supply and demand are the main driving factors for the decline in domestic shipping market prices.
It is expected that sea freight prices will be less likely to rise significantly in 2023
Chen Jia, a researcher at the Monetary Research Institute of Renmin University of China, believes, “Looking forward to the global trade growth pattern in 2023, various challenges will still be severe, and negative factors will be amplified. The deepening of stagflation in Europe and the United States will lead to an increasing probability of their economic recession, and the global With the trade volume and price down, it will be difficult to repeat last year’s strong counterattack and substantial growth in containers this year.”
Mr. Xu, who is engaged in cross-border e-commerce business in Foshan, said, “I have always paid close attention to the price of shipping containers, because it is highly linked to the company’s operating costs. From the early days when it was ‘hard to find a box’, now the price has become much more friendly. It has dropped a lot, and we do not expect there to be a possibility of a sharp rise in 2023.”
“As the Spring Festival approaches, the unit price of some land container truck transportation has increased to a certain extent. Compared with the end of last year, it has indeed rebounded, but the increase is not significant. It is estimated that the possibility of a sharp increase like in the past is very low.” Part of Guangdong A person from a logistics network in the Hong Kong and Macao Greater Bay Area said.
Tian Yuan, an associate researcher at the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, believes that the shipping market is a relatively competitive market, and shipping prices are a full reflection of market supply and demand.
In international shipping, ship and container shipping capacity is gradually released and growing rapidly. The mismatch between supply and demand has led to a continued downward trend in market freight rates.
On the one hand, prices in the shipping market, which is deeply dependent on the prosperity and stability of global trade, are still highly under pressure this year; on the other hand, with the adjustment of my country’s epidemic prevention and control policies, it is conducive to fully unleashing and is expected to boost the total demand for domestic and foreign trade, and prices have fallen and volumes have stabilized. The probability also exists.
149 voyages were cancelled, with the three major alliances accounting for 78.5%
Currently, global transportation demand continues to decline, and shipping companies continue to suspend sailings on a large scale and reduce shipping capacity.
According to the latest data from Drewry, of a total of 707 scheduled sailings on the main trans-Pacific, trans-Atlantic and Asia trade routes to Northern Europe and the Mediterranean, the number of sailings between weeks 2 (January 9-15) and week 6 ( 149 sailings were canceled in the five weeks from February 6 to 12, accounting for 21% of the total.
During this period, 58% of the suspensions occurred on the eastbound trans-Pacific trade route, 31% on the Asia to Northern Europe and Mediterranean trade route, and 11% on the westbound transatlantic trade route.
Over the next five weeks, THE Alliance has announced cancellations of a whopping 54 sailings, followed by Ocean Alliance and 2M Alliance, which have canceled 46 sailings and 17 sailings respectively. During the same period, non-shipping alliances implemented 32 suspensions.
Drewry said that before the Lunar New Year (January 22), although the pre-holiday freight peak did not arrive as expected, spot freight rates showed greater flexibility. This week, Drewry’s WCI Comprehensive World Container Index showed that the freight rate on the Shanghai-Rotterdam route increased by 10% month-on-month.
However, this small rebound appears fragile as carriers continue to cancel more sailings as the market is expected to be overcapacity in 2023.
</p
