Freight Rates Surge as Four Major Trade Lanes Soar

As the 10% temporary tariff policy imposed by the United States on global imported goods will expire on July 24, cargo owners are rushing to ship goods before the window closes, pushing the container shipping market to heat up again. The latest Shanghai Export Container Freight Index (SCFI) rose sharply by 353.58 points to 2571.73 points, with a weekly increase of 15.94%, rising for the fifth consecutive week. Freight rates on major European and American routes have increased across the board. The US West Route has returned to the US,000/FEU mark, and the US East Route has exceeded the US,000/FEU mark. The market has once again been in a tense situation where "a cabin is hard to find".

According to the latest data, the freight rate for 40-foot containers on the Far East to US West route is US,149/FEU, an increase of US5 from the previous week, a weekly increase of 31.54%; the freight rate on the Far East to US East route rose to US,333/FEU, a single week increase of US,020, or 23.64%. The European direction also performed strongly: the freight rate for 20-foot containers from the Far East to Europe reached US,475/TEU, a weekly increase of US0, or 29.92%; the freight rate from the Far East to the Mediterranean was US,750/TEU, a weekly increase of US3, or 16.93%.

Industry analysts believe that the main driving force for this round of freight rate increases comes from the rush for shipments in the North American market. The 10% temporary tariff in the United States will expire on July 24. A large number of cargo owners have accelerated shipment arrangements, hoping to have their goods delivered to the United States before policy adjustments. Xie Fulong, general manager of Wanhai Shipping, said that since May, the global container shipping market has reappeared in the phenomenon of space grabbing. Not only cargo owners in mainland China and Taiwan are actively shipping goods, but Southeast Asian markets are also competing for space.

Market nervousness is further reflected in shipping companies' price increase plans. Many large freight forwarders revealed that the current US-West and US-East routes are generally full, and the shipping company’s new round of price increases on June 1 has basically been confirmed. Among them, the freight rate for 40-foot containers on the US West Line is expected to rise from the current US,400 to around US,850; the US East Line is expected to increase from US,600 to approximately US,300. For European routes, freight rates are expected to rise from US,000 to a range of US,300 to US,500.

It is worth noting that Mediterranean Shipping Company (MSC) has taken the lead in announcing a price increase plan. In addition to the adjustment on June 1, it also notified on May 28 that it planned to further increase the freight rate on the European route to US,000/FEU starting from June 15. If the above price increase plan is successfully implemented, the increase in some routes will be astonishing. Taking the US West Line as an example, the freight rate has risen from about US,600 in early May to an estimated US,850 in early June, a cumulative increase of more than 86%; the European route has increased from about US,200 in early May to US,400, doubling in just one month. If MSC's offer of US,000 in mid-June comes to fruition, the increase in European routes will exceed 170% compared to the beginning of May, which is described by the industry as a "crazy rise."

Despite the current hot market, the market remains cautious about subsequent trends. Yang Ming Shipping stated at the shareholder meeting that although global cargo volume has maintained overall growth, the shipping market still faces multiple uncertainties such as the continued delivery of new ships, the situation in the Red Sea, port congestion, regional conflicts, and tightening environmental regulations. There are great variables in the future supply and demand relationship and market environment. Industry insiders in the freight forwarding industry also pointed out that market supply and demand were still tight in early June, and freight rates are expected to remain high in the short term. However, whether they can continue to rise in the future depends on the situation in the Middle East, changes in international oil prices, and congestion in major European and American ports.

Overall, the rush for shipments brought about by the North American tariff window period is becoming the most direct driving force for this round of freight rate increases. In the context of tight space and continued price increases by shipping companies, the container shipping market may remain volatile in June. Cargo owners and freight forwarders need to make space booking and cost management arrangements in advance.

• Far East to Europe:2745 USD/TEU,up 29.93%

• Far East to Mediterranean:3750 USD/TEU,up 16.93%

• Far East to West America:4149 USD/FEU,up 31.55%

• Far East to East United States:5333 USD/FEU,up 23.65%

• Persian Gulf Route:4462 USD/TEU,up 3.62%

• South American route (Santos):5751 USD/TEU,up 12.7%

• Australia and New Zealand routes:1487 USD/TEU,up 6.4%

Near ocean line,Far East to Southeast Asia increased by US per TEU, a weekly increase of 3.76%;Japan's Kansai and Kanto routes remained unchanged; routes from the Far East to South Korea increased by US/TEU.

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