Supply and demand conditions improved, and freight rates continued to fall. There are many uncertain factors, and the future trend is still unclear.
Recently, the freight rates of major routes in the container shipping market have changed the pace of rising and have continued to decline in the past month. Even so, since the high freight rate in the fourth quarter of last year continued to the first quarter of this year, the current freight rate is still much higher than the same period last year.
Multi-route freight rates drop
According to Drewry data, as of March 17, the World Containerized Freight Index (WCI) was US$8,832.23/FEU, down 3.8% month-on-month and still up 79% compared with the same period in 2021.
In terms of routes, the Shanghai-Rotterdam spot freight rate was US$12,221/FEU, down 4% month-on-month; the Shanghai-Genoa spot freight rate was US$12,619/FEU, up 1% month-on-month; the Shanghai-Los Angeles spot freight rate was US$10,154 /FEU, down 7% month-on-month; Shanghai-New York spot freight rate was US$12,276/FEU, down 5% month-on-month.
On March 18, the China Export Container Freight Index (CCFI) released by the Shanghai Shipping Exchange was 3301.10 points, down 1.9% from the previous month. Among them, the freight index of European routes decreased by 1.9% month-on-month, the freight index of Mediterranean routes decreased by 0.5% month-on-month, the freight index of US-West routes decreased by 3.8% month-on-month, and the freight index of US-East routes increased by 2.1% month-on-month.
According to the Ningbo Export Container Freight Index (NCFI) released by the Ningbo Shipping Exchange, as of March 18, the composite index closed at 3,613.9 points, a month-on-month decline for 11 consecutive weeks, down 15.3% from the high level at the end of December 2021, and from the end of February. It fell 8.4%.
Judging from the situation of different routes since the end of February, the freight index of the South America east route decreased by 19.3%, the freight index of the South American west route decreased by 16.7%, the freight index of the Middle East route decreased by 17.6%, the India-Pakistan route decreased by 13.7%, and the freight index of the European route decreased by 13.7%. The price index fell 11.7%, the most significant decline. The average market price of the 40-foot TEU after the price increase in the Europe, South America East, South America West and America West routes fell by more than US$1,500/FEU, and the freight rate fell the most. It can be seen that, in the past month, although the freight rates of some routes remained flat or increased slightly month-on-month, in general, they showed a downward trend.
As far as the single-day freight rate is concerned, in early March, the freight rate trend showed a clear inflection point.
According to Xeneta data, recently, freight rates from China to Europe suffered the largest one-day drop since February 2020. On March 1, the average spot rate on the route fell by nearly $500/FEU to $13,340/FEU. This is the first time since September 2021 that freight rates on this route are below $13,500/FEU.
However, the agency also pointed out that the current freight rates on the Asia-Europe route are still at a very high level compared to before the COVID-19 outbreak. In 2018-2020, the average spot freight rate on this route was only US$1,500/FEU.
Based on this, Zheng Jingwen, a senior analyst at the International Shipping Research Institute of the Shanghai International Shipping Research Center, said in an interview with a reporter from China Shipping Weekly that according to the trend of previous years, the freight rate will indeed drop slightly and briefly in the first quarter.
Qian Hanglu, an industry analyst at Ningbo Shipping Exchange, also said: "This is mainly due to the traditional off-season, which makes the overall freight rate of the container shipping market continue to decline from mid-January to late March. For example, in 2019 In 2021 and 2021, the NCFI composite index has experienced a 10-week decline, with a cumulative decline of 25.7% and 19.4%, respectively."
