Supply and demand in the maritime market has reversed dramatically this year, with supply outstripping demand, in stark contrast to the “hard to find containers” of early 2022.
After rising for a fortnight in a row, the Shanghai Export Container Freight Index (SCFI) fell below 1000 points again. According to the latest data released by the Shanghai Shipping Exchange on June 9, the SCFI index fell 48.45 points to 979.85 points last week, a weekly decline of 4.75%.
The Baltic BDI index even fell for 16 consecutive weeks, with the freight index pushing 900 points, hitting the lowest level in 2019.
The latest data released by the General Administration of Customs showed that exports in May this year fell by 7.5% year-on-year in US dollar terms, also the first decline in the past three months.In addition, the Shanghai Shipping Exchange also released an update on June 10th saying that “demand for export container transport has shown weakness, with a large number of routes seeing a fall in freight rates”.
The leader of the China International Shipping Network had said in an interview: “The current global economic downward pressure, coupled with the overall weak demand, is expected to continue to keep shipping freight rates running at a low level in the future. Overcapacity is also likely to lead to continued low maritime prices in the next five years”.
Freight prices continue to be low and the average speed of global container ships has seen a significant drop.According to data from the Baltic International Shipping Union statistics, in the first quarter of 2023, the average speed of global container ships, down 4% year-on-year, down to 13.8 knots.
It is expected that by 2025, the container speed will also fall by 10% on top of this.Not only that, but throughput at the two major US ports of Los Angeles and Long Beach continues to decline.With lower freight rates and weak market demand, the rates on many US West and European routes have fallen to the edge of cost for consolidators. For some time to come, consolidators will combine to stabilise rates during periods of low volumes, and perhaps a reduction in the number of routes will become the norm.
For enterprises, the preparation period should be appropriately shortened, the first stage must be determined in advance of the exact time of departure of the shipping company. DINSEN IMPEX CORP service customers for more than ten years, will avoid all kinds of risks in advance to provide the best service.
Post time: Jun-16-2023