What is the reason for the rapid increase in container freight rates?
- Author:Kyrie
- Source:Sunny
- Release Date:2020-08-21
Recently, the chairman of a stock company called on the social platform to increase the shipping capacity to achieve the purpose of reasonable adjustment of freight rates, which triggered the industry's attention and discussion about the recent rapid increase in container freight rates.
It is reported that the container freight rate has started to rise sharply since June. According to the latest data of the Shanghai Export Container Freight Index, the freight rates of Asia-Europe, Asia-Western and Eastern US routes have all increased. The average number of cabins of ships on the Shanghai Port West Coast and East Coast routes is at a full load level, and some flights even appear to be violent. Supported by fundamentals, most airlines increased their booking prices, and the spot market freight rates rose. The freight rates in the US West and East US routes have both risen to their highest levels since 2019. Why did the container freight rate soar? What is the future price trend?
Is the shipping company deliberately controlling capacity?
According to the latest data in the FREIGHTOS briefing, since last week, the container freight rate of the China-US West Coast route has risen by 11%, reaching a record high of US$3,058/FEU, which is also a substantial increase of 110% compared to the same period last year. The China-US East Coast freight rate also saw a slight increase of 3% to USD 3,466/FEU, a 30% increase compared to the same period last year. Nerijus Poskus, vice president and head of global shipping operations at Flexport, a digital freight forwarding company, also lamented: "The trans-Pacific eastbound market is becoming crazy." He said that the current market situation is unprecedented.
Is the soaring freight rate caused by the shipping company deliberately controlling the capacity? The analysis believes that although in the second quarter of this year, major shipping alliances (shipping companies) "cancelled" a large number of Asian-West Coast voyages to ensure freight rates. However, in the current situation, shipping companies have not deliberately continued to use this market strategy that once triggered the view of driving up prices.
It is reported that the container freight rate has started to rise sharply since June. According to the latest data of the Shanghai Export Container Freight Index, the freight rates of Asia-Europe, Asia-Western and Eastern US routes have all increased. The average number of cabins of ships on the Shanghai Port West Coast and East Coast routes is at a full load level, and some flights even appear to be violent. Supported by fundamentals, most airlines increased their booking prices, and the spot market freight rates rose. The freight rates in the US West and East US routes have both risen to their highest levels since 2019. Why did the container freight rate soar? What is the future price trend?
Is the shipping company deliberately controlling capacity?
According to the latest data in the FREIGHTOS briefing, since last week, the container freight rate of the China-US West Coast route has risen by 11%, reaching a record high of US$3,058/FEU, which is also a substantial increase of 110% compared to the same period last year. The China-US East Coast freight rate also saw a slight increase of 3% to USD 3,466/FEU, a 30% increase compared to the same period last year. Nerijus Poskus, vice president and head of global shipping operations at Flexport, a digital freight forwarding company, also lamented: "The trans-Pacific eastbound market is becoming crazy." He said that the current market situation is unprecedented.
Is the soaring freight rate caused by the shipping company deliberately controlling the capacity? The analysis believes that although in the second quarter of this year, major shipping alliances (shipping companies) "cancelled" a large number of Asian-West Coast voyages to ensure freight rates. However, in the current situation, shipping companies have not deliberately continued to use this market strategy that once triggered the view of driving up prices.