The latest data of major freight indices shows that spot freight rates continue to decline. However, increased port congestion due to factors such as strikes is slowing the rate of decline.
The Drewry World Container Index (WCI) has fallen for 21 consecutive weeks. In the latest week, the WCI composite index edged down 0.7% from the previous week to $6,998.8/FEU, down 21% year-on-year. The Baltic Sea Freight Index (FBX) global composite index was at $6,414/FEU, down 1% from the previous week.
The analysis said that German port strikes and congestion at other major container ports in northern Europe are slowing the decline in spot freight rates. According to the latest data of WCI, FBX and XSI spot freight index, the spot freight rate of Asia-Europe routes fluctuated slightly. The WCI index showed that the freight rate from Shanghai to Rotterdam was US$9,182/FEU, down 1% from the previous week; the freight rate from Asia to North Europe in the FBX index was US$10,393/FEU, down 0.7%.
Although shipping lines have cancelled some sailings, they have had to start touting discounts on the market to attract bookings. According to the report of Ningbo Shipping Exchange, there is insufficient demand in the European route and the overall excess capacity, and the market freight rate continues to decline.
Congestion at Nordic ports, however, is draining capacity due to longer wait times for berths and slower berthing speeds, which could tip the supply-demand balance in favor of shipping companies in the coming weeks.
On Thursday, 12,000 dockworkers at the German ports of Hamburg, Bremerhaven and Wilhelmshaven went on strike for 48 hours, suspending port operations and exacerbating long-standing congestion at Nordic container ports. Before the strike, there were reports that ships had to wait up to two weeks in the port of Hamburg to berth.
In addition, in the trans-Pacific route, the Ningbo Shipping Exchange reported that the overall supply of the North American route was oversupplied, and the spot market booking price continued to fall. The latest data from the WCI index shows that the spot freight rate from Shanghai to Los Angeles is US$7,480/FEU, down 1% from the previous week and down 23% year-on-year; the spot freight rate from Shanghai to New York is US$10,164/FEU, basically unchanged. .
According to FBX data, the Asia-West America spot freight rate fell 2% from the previous week to US$7,234/FEU. The Asia-East spot freight rate was US$8,233/FEU, up 1% from the previous week. The rise was partly attributable to increased congestion at ports in the eastern United States, the analysis said. In July, the backlog of ships at the Port of New York-New Jersey increased, waiting for more than 20 days. Waiting time at the Port of Savannah has also increased to 10 to 20 days.
One reason for the disconnect between weak demand in Europe and the U.S. and continued congestion at ports is high inventories and depleted off-dock storage space.
"With shelves and warehouses filling up, the current drop in demand could exacerbate congestion as imports with nowhere to go get stuck in port container yards or rail hubs for extended periods of time," said Judah Levine, head of research at Freightos. This will take some time to ease. . "The process of easing and falling is likely to be slow for congestion and freight rates."
According to the latest voyage cancellation tracking report released by Drewry, between weeks 29 and 33, a total of 758 scheduled voyages on major routes such as transpacific, transatlantic, Asia to northern Europe and the Mediterranean, 76 voyages were cancelled, and 71 voyages were cancelled. % of the cancelled sailings will be on eastbound transpacific routes, mainly to the west of the US.
Among them, the three major shipping alliances cancelled a total of 61 voyages. 2M Alliance cancelled 20 voyages, THE Alliance cancelled 23.5 voyages, and Ocean Alliance cancelled 17.5 voyages.
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