SIMIC

This was revealed in a Shipping Gazette survey of falling rates on most major routes from South to East Asia with only the Mideast via Jeddah on the Red Sea and Persian Gulf ports escaping the downturn.

Typically, freight rates on the Asia-west coast trade lanes have plunged from a high of US$20,000 per FEU a year ago to $1,850 per FEU today.

Such low prices, said a Shenzhen shipper, will hold up till mid-November with MSC, Maersk, ONE, Hapag-Lloyd and Yang Ming, for cargo from Yantian, Shanghai and Ningbo to LA-Long Beach.

Some say transpacific rates will drop further to $1,500 in the next few weeks. In fact, according to feedback, the market has already offered of $1,500 per TEU.

The latest Drewry World Container Index (WCI) fell seven per cent in a week, marking the 35th consecutive weekly decline. It was down 67 per cent from the same period last year.

Losses have narrowed since early October after a double-digit week of declines. However, the seven per cent decline in the current period was the largest decline in October.

Rates on the Shanghai-Rotterdam Nordic route dropped 13 per cent, while the Shanghai-Los Angeles freight rate fell 81 per cent from its peak in September 2021.

The latest issue of Shanghai Shipping Exchange's container freight index SCFI reached 1,697.65 points, down 81.04 points or 4.56 per cent for the week, marking the 19th consecutive weekly decline.

Data shows that economic conditions in the euro zone continue to decline, with further weakening of manufacturing activity, especially output in energy-intensive industries.

Inflation has caused the European cost of living to soar. At present, the fundamentals of the European economy are pointing to recession.

The SCFI Shanghai to Europe spot rate was $2,102/TEU, down $277 or 11.64 per cent for the week; the freight rate of SCFI Shanghai-Mediterranean route was $2,344/TEU, down $224 or 8.72 per cent for the week.

In North America, the initial value of the US Markit manufacturing PMI in October was 49.9. This was a new low since June 2020. The growth of transportation demand was weak with the relationship between supply and demand weakening as rates declined.

For South America, the Santos rate was $4,541/TEU, down CNY518 or 10.24 per cent off for the week.

But the Persian Gulf route enjoyed rising rates, up 19.02 per cent by $276 to $1,727 per TEU with cargo volumes holding steady.

Southeast Asia rates (Singapore) stood at US$346 per TEU down by US$6, declining 1.70 per cent for the week.

Ningbo Shipping Exchange's latest Ningbo Containerised Freight Index (NCFI) closed at 1,320.3 points, down 3.6 per cent from the previous issue.

Five of the 21 routes enjoyed rate increases while 16 suffered declines. Among the major ports along the "Maritime Silk Road", the freight index of nine ports rose, while the freight index for seven fell.

On European routes, overall transportation demand was sluggish, and the spot market booking price has begun to fall. The freight index of European routes was 1,328.9 points, down 15.1 per cent from last week.

The freight index for the US east coast was 1,364.0 points, down 11.2 per cent from the previous week. The freight index for the west coast was 1,633.6 points, down 6.7 per cent from previous week.

North American routes: The market is still in a state of oversupply, and the freight rate of the route maintains a downward trend, and the freight rate level continues to refresh the low level of the year.

The freight index showing the China-US east coast route was 1,655.1 points, down 9.8 per cent from the previous week. The freight index on the US west coast route was 959.9 points, down 5.2 per cent from the previous week.

In addition, the following routes have relatively high market volatility.

Red Sea Route: Liners have actively adopted capacity control measures to significantly reduce the effective capacity of the market, resulting in a very tight route capacity, and the market booking price has risen by more than $1,000 per FEU in a single week. The freight index of the Red Sea Route was 2347.1 points, up 44.9 per cent from the previous week.

ASEAN region: A total of two ports' freight indexes rose this week, while four ports' freight indexes fell.

Ningbo-Singapore freight index fell 4.9 per cent month-to-month; Ningbo-Klang freight index increased by three per cent month to month.

Ningbo-Ho Chi Minh freight index decreased by 2.4 month to month; Ningbo-Bangkok freight index decreased by 5.1 month-to-month.

Ningbo-Laem Chabang freight index fell by 12.1 per cent month-on-month; the Ningbo-Manila freight index rose 0.1 per cent month-to-month.

Ningbo-Constanta freight index decreased by seven per cent month-to-month.

For South Asia, two port freight indices rose in a single week. Ningbo-Nawasiva (India) freight index increased by 9.8 per cent month to month; the Ningbo-Pipavawo (India) freight index increased by 18.8 per cent month to month.

In the Middle East, four port freight indices rose in a week, while one port freight index fell. Ningbo-Istanbul freight index fell 10.3 per cent month-to-month. Ningbo-Aqaba freight index increased 36.7 per cent month to month.

Ningbo-Jeddah freight index increased by 52.2 month to month; Ningbo-Dammam (Saudi Arabia) freight index increased by 40.9 per cent month to month; the Ningbo-Dubai (UAE) freight index increased 49.3 per cent month to month.