Recently, the global container shipping market has continued to show strong upward momentum, driven significantly by the peak season effect boosting freight rate increases. According to the latest Shanghai Containerized Freight Index (SCFI) released on the 28th, there was a substantial weekly increase of 6.87%, reaching 3714.32 points, marking the 12th consecutive week of rises.
Among major routes, the previously stable European routes exhibited strong upward movements again last week, with rates soaring by 12.5%. Similarly, rates on the Mediterranean and East Coast US routes also increased by over 10%. Specifically, the European route saw a 12.55% increase, surpassing $5000 per TEU, while the East Coast US route increased by 12.05%, breaking through the $9000 per FEU mark.
As the third quarter enters the traditional peak shipping season between Europe and America, coupled with trade frictions and tariff hikes, exporters are advancing shipments to cope with market changes. Simultaneously, concerns over delays in delivery due to the crisis in the Red Sea have raised inventory levels for retailers in Europe and America, leading to full bookings on these routes extending through to the end of July.
Shipping companies successfully raised rates in May and June. Major freight forwarders disclosed that starting from July 1st, rates on the East Coast US route were adjusted upward by $2000 due to port worker strike threats, while the West Coast US and European routes saw increases of $1000-1200 per container. Most rates on the Mediterranean route remained unchanged around $7000 per container.
However, it is anticipated that the next round of rate hikes around July 15th may see a slight easing in the rate increases for the West Coast US route. Several freight forwarders indicated that under the July 1st rate adjustment plan, rates on the West Coast US route are set to rise from $7100-7400 to $8100-8400, and the East Coast US route from $8300-8400 to $10300-10400, becoming the first route with rates exceeding $10000.
Rates on the European route will rise from $7500 to $8500, while the Mediterranean route is expected to remain around $7000, with some companies possibly raising rates by $200-300.
Market reports suggest that several shipping companies, including Mediterranean Shipping and CMA CGM, plan to introduce additional sailings in July, with CMA CGM offering preferential rates to major European clients. Meanwhile, some shipping companies that had exited the European and American routes post-pandemic are now returning.
Therefore, industry estimates suggest that the planned rate increases of $1000-2000 per container for the West Coast US and European routes around July 15th may face challenges in implementation. Shipping companies have already relaxed weekly container limits for long-term customers on the West Coast US route, with some predicting that rates on the European route may only increase by $200-300. In conclusion, the specific impact of the mid-July rate increases remains to be observed.
Currently, spot cargo space remains tight, continuing to drive up rates. It is advisable to prepare shipments early given the current conditions.
