August 29, 2024
Shipping consultancy firms predict that freight rates will decrease by 70% over the next 12 months. This forecast is based on data from the Shanghai Containerized Freight Index (SCFI), which shows a continuous decline in freight rates since July. As demand weakens, container shipping companies are striving to slow the rate of decline, but they face challenges. Freight futures prices continue to weaken, with rates for transactions in Northern Europe being more than 70% lower than spot prices. Long-term contract rates significantly impact the global container shipping market. Although the decline is not as severe as the sharp drop at the end of 2022, freight rates are not expected to rebound by the end of this year, and the post-Chinese New Year increase in 2025 is unlikely to be repeated. A 70% price drop would require resolving the Red Sea crisis and restoring trade routes through the Suez Canal.
