New Year "Crash"! Over 100 Voyages Suspended...Shipping container price 20ft to Davao

The latest Shanghai Export Container Freight Index (SCFI) reported at 1316.75 points, a 9.68% drop in a single week and has fallen for four consecutive weeks. Almost all major routes were green, with significant declines:

• Freight rates on European and Mediterranean routes fell by 11.1% and 12.05% respectively.

• Freight rates for the US West and US East routes were reduced by 10.41% and 10.04% respectively.

• The decline in the Persian Gulf route was particularly sharp, reaching 22.59%.

According to Drewry's World Container Index (WCI), as of January 29, the composite index fell by 5%, and spot freight rates on many key routes such as Shanghai to New York, Los Angeles, and Rotterdam all experienced declines ranging from 4% to 7%.

A large freight forwarder revealed that the current spot market quotations for 40-foot containers in Europe and the United States have generally been reduced by US0-300 compared with the previous period.

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The direct reason for the general correction in freight rates is the superposition of the Lunar New Year holiday effect and Ramadan. In response to the long holiday, many cargo owners have concentrated shipments in advance since December last year, resulting in a significant reduction in expected shipments from January to before the holiday. Market demand is periodically weak, while market capacity supply is relatively sufficient during the same period.

The pressure of imbalance between supply and demand is directly reflected in the shipping companies’ capacity adjustments. The Drewry Container Capacity Report shows that over the next five weeks – from Week 7 (February 9-15) to Week 11 (March 9-15) – some 710 scheduled sailings have beenAnnouncing the cancellation of 125 voyages, equivalent to 18% of the planned voyage.

From the perspective of route distribution, the suspension of sailings is mainly concentrated on the eastbound trans-Pacific route, accounting for 63% of canceled sailings; Asia-Europe and Mediterranean routes account for 14%; and westbound trans-Atlantic routes account for 7%. About 82% of the remaining voyages are still carried out as planned.

Looking at different regions, the suspension of sailings on the US line is particularly severe. Shipping companies have announced the cancellation of 18, 27 and 28 sailings respectively in the next three weeks. The frequency of cancellations is significantly higher than the same period in previous years. On the European route, due to factory shutdowns during the Spring Festival and intensified market volatility, 9, 16 and 9 voyages will be canceled respectively in the next three weeks.

Many shipping companies have informed that the current freight rate level is expected to continue until the end of February. This means that the market will most likely maintain a weak consolidation pattern in the short term.

According to general analysis in the industry, the pace of market recovery after the holidays will become the key. Southeast Asia may be the first to resume shipments due to the short holidays. However, the recovery of cargo volumes on major routes such as Europe and the United States and the stabilization and rebound of freight rates may not be clear until early or even mid-March.

Currently, in addition to paying attention to freight rate fluctuations, operational interference factors such as port weather and changes in geographical routes also deserve close attention from all logistics parties. The market is going through the test of the traditional post-holiday off-season and is waiting for the direction of a new round of volume trends.