Freight Rates Rise for Two Consecutive Weeks! U.S. Routes Continue to Climb, European Routes Turn Down, Persian Gulf Routes Up 200%
Under the influence of multiple factors such as continued tensions in the Middle East, rising fuel costs, and shrinking shipping capacity, the global container shipping market has experienced structural differentiation. The latest Shanghai Export Container Freight Index (SCFI) has risen for two consecutive weeks. The freight rates on the US line have remained strong, while the European line has experienced a correction. Among them, the Persian Gulf route has been significantly affected by the geopolitical conflict, and the cumulative freight rate has increased by nearly 200% compared with the pre-war period, making it the focus of most attention in the current market.
The latest data shows that SCFI continued to strengthen in the first week of April, reporting at 1854.96 points, an increase of 28.19 points or 1.54% from the previous week, achieving a second consecutive week of gains. However, from a structural point of view, the four major ocean routes show obvious differentiation: North American routes continue to rise, while European and Mediterranean routes have declined.
Specifically, the freight rate for the Far East to US West route increased slightly by 0.3%, and the Far East to US East route increased by 2.76%; in comparison, the European route fell by 3.11%, and the Mediterranean route fell by 2.89%. Industry insiders pointed out that this trend of "the United States is strong and Europe is weak" reflects the imbalance between the current global trade demand and the pace of regional market recovery.
It is worth noting that the Persian Gulf route has become the biggest highlight of this round of rise. Data shows that the freight rate on this route increased by 6.68% in a single week, reaching approximately US,977 per 20-foot container (TEU). If compared with the level of approximately US,327 on February 27 (before the outbreak of the Middle East conflict), the cumulative increase is as high as 199.69%. The market generally believes that this rise is directly driven by tensions in the Middle East, rising shipping security risks, and restricted route supply.
On North American routes, spot market prices have risen for two consecutive weeks. According to industry insiders in the freight forwarding industry, the current reference price per 40-foot container (FEU) for the US West route is approximately US,525, and that for the US East route is approximately US,525. Although some flights still have special fares due to differences in loading rates, the overall price has basically stabilized in the rising range.
At the same time, April is the season for signing long-term U.S. line contracts. Against the backdrop of rising oil prices, shipping companies are using a variety of methods to support freight rates. On the one hand, some airlines have added emergency fuel surcharges (EBS) to hedge against rising jet fuel costs; on the other hand, they have increased "blank sailing" efforts, especially reducing capacity on the US East route, to stabilize market supply and demand.
Market news shows that shipping giant MSC plans to increase freight rates on the U.S. line again on April 8, by about US0 per 40-foot container. In addition, some shipping companies will also introduce an inland fuel surcharge (IFS), which is expected to take effect in mid-April to cover the rising pressure on diesel costs in the multimodal transport link.
From the demand side, with the full resumption of domestic work after the holiday, export volume is gradually recovering. Many shipping companies, including Yang Ming Shipping, said that ship loading rates on European and American routes have continued to rebound since mid-March, providing certain support for freight rates.
However, the industry generally believes that the current market volume has not yet been fully released, and the increase in freight rates is more driven by cost-side and supply-side factors. The conflict in the Middle East has pushed up oil prices, the safety risks of key waterways have increased, and some shipping capacity has been reduced due to detours or hedging, which together form the core logic of the current upward trend in freight rates.
Looking ahead to the market outlook, the shipping industry is generally optimistic. It is expected that under the support of cost pressure and shrinking shipping capacity, freight rates will still have room to increase by about 7% to 10% in early April; and as demand is gradually released, it cannot be ruled out that the market will usher in a new round of gains in late April.
Overall, the current container shipping market is in the stage of “early recovery of demand rising costs”, with obvious regional differentiation. In the context of the intertwined geopolitics and the game of supply and demand, freight rates will remain highly volatile.
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