What is in store for container shipping? The latest prognosis claims that the SCFI will reach its bottom in the middle of 2023. Sector profitability will follow suit and hit its low in the second part of the new year. For liners, share prices will most probably plummet by the end of the first quarter of 2023. The current dynamic of the spot rates is currently serving as proof of the forecast. For 33 consecutive weeks, the rates have been falling. the WCI slid off 6% to $3,483, the SCFI lost about 5.7% to result at $1,814.
Evergreen has joined the list of companies that are starting to renegotiate contract terms with shippers to reduce the difference between the contracts and the spot market rates.
The period of notorious logjams at the US ports is ending as they start easing as a result of the falling demand. They will still take a long time to clear up, but the current tally is now back to June levels and 35% off recent highs. But this dynamic does not stop American shippers from considering near-shorring. Fed up with import delays, there are planning to tackle the opportunities for trade between the Americas. Near-shoring has been discussed for a long time but it was initially dismissed as an expensive option.
Airfreight cannot get away from the spot rate pressure. The TAC Index of a basket of major routes, showed rates falling 6.3% in the week to 10 October. Year on year, it is 27.7% down. The demand is also sliding down, and the industry wonders how long it will last.
The breakdown of two (out of three) cranes in the Altynkol terminal on the Kazakh-Chinese border is causing disruption on the Silk Road. 33 trains are stuck on the border and on the other Chinese border crossings the redirected trains are stacking up.
The strike in South Africa will most probably affect the import of goods critical to the South African economy as export wait time doubles as a result. The strike has spread to all African terminals.
Routes and services
- Samskip and Hector Rail have launched a new intermodal service between the port of Rostock and Duisburg. The train service is all-electric. BesidesISO containers, they have offered mega trailers and P400 trailers, wagons deployed accommodate non-cranable trailers.
- Hupac is starting a new shuttle train service that will run from Ludwigshafen to Dorpen via Duisburg.
- A new intermodal service linking Yorkshire and Scotland is underway making the service on its route easier since the service by road options used to be complicated.
- Russia will invest in the development of the Rasht-Anzali railway to develop the transport links spanning from its territory all the way to India.
- New service by CMA CGM: Port Everglades – Philadelphia – New York – Kingston – Buenaventura – Callao – San Antonio – Guayaquil – Cartagena – Port Everglades.
- CMA CGM announced a new winter setup to the EUROMAR service: Tanger – Casablanca – Agadir – London Gateway – Rotterdam – Hamburg – Antwerp – Le Havre – Vigo – Tanger.
- MSC is launching a new direct call at the Port of Abidjan on its Africa Express line serving the market between Asia and Ivory Coast.
Other
- TSS Pearl has sunk as a result of the fire in the Red Sea. All the crew was evacuated.
- Ukrainian railways will adopt a new tariff scheme. It will cut down on the base rate schemes and reduce them to just one. The base rates for rail freight transport will calculate only the transport distance, cargo weight, special transport features, and routing.
- The agreement reached between NCCC and Class I freight railroads has been rejected by the BMWED union. Railroad employees strive to be heard and valued, according to the statement from the union members.
- GEODIS has acquired Need It Now Delivers in order to strengthen its position in contract logistics and final-mile delivery.
These are only several changes that occurred in more than 250 bn freight rates across 25 million routes with more than 1 million market players. Want to share some news about your company, services, and routes? Just post them on MAXMODAL, a multimodal network that digitally connects routes and rates worldwide to automate sales and operations across container transportation & logistics industry. Join to innovate.
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Container spot and short-term freight rates from China remain under pressure after the Golden Week holiday, as sluggish demand obliges ocean carriers to take out more capacity.
Reports suggest vessel utilisation on sailings from Asia to North Europe this week was much worse than expected, with talk of load factors “below 70%” on some voyages.
Spot rates for North Europe, as recorded by Drewry’s WCI index, fell another 3% this week, to $4,595/40ft, and have lost half of their value since the summer.
The disappointing utilisation and mid-term bearish outlook for the market has pushed carriers into temporary capacity adjustments on the tradelane, over and above their blanking programmes.
Maersk announced on Monday it was “looking to balance the network” by removing capacity, starting with axing the 26 October sailing from Ningbo of the 16,652 teu MSC Hamburg on the 2M’s AE1/Shogun loop.
And the carrier said it wanted to “make sure customer impact was minimised” by “rebooking cargo to the remaining network in advance”.
price from china to europe or US will continue decrease until the price like covide before.LOL i think around 1500USD to LA is the end.
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Accelerating freight rate erosion across the major shipping tradelanes is causing analysts to revise predictions of a ‘normalisation’ of the container market.
According to a new HSBC research paper, at the current speed of spot rate erosion, market rates could fall to 2019 levels as early as the end of this year –previous expectations were for mid-2023.
The paper’s authors note that the Shanghai Containerized Freight Index (SCFI), which tracks headhaul spot rates from China, has fallen by 51% since July, representing an average 7.5% weekly decline which, if continued, would crash the index back to pre-pandemic levels.
“We argue that weaker-than-expected demand, faster easing of congestion and price competition to get marginal cargo led to this decline,” said the bank’s analysts.
Based on this backdrop, HSBC’s shipping, ports and Asia transport research team is advancing its “trough scenario”, the bottoming-out point for the industry, to mid-2023, versus the previous estimate of 2024.
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