July 23, 2024
The previously soaring sea freight rates in the container shipping market have seen a turning point since mid-July, with an overall pullback beginning to emerge.
On July 19th, the latest Shanghai Export Container Comprehensive Freight Index was published at 3542.44 points, marking a decrease of 3.6% from the previous period. Major long-haul routes to Europe and North America all experienced declines exceeding 1%.
Among them, the spot market booking price for the Europe route slightly fell back. On July 19th, the freight rate (including sea freight and surcharges) from Shanghai Port to the basic ports in Europe was $5000 per TEU, down by 1.0% compared to the last period. The freight rate for the Mediterranean route moved in tandem with the Europe route, seeing a slight drop to $5361 per TEU, a decrease of 1.2%.
The supply-demand relationship for the North American route weakened, leading to continued adjustments in market rates. On July 19th, the freight rate (including sea freight and surcharges) from Shanghai Port to the West Coast of the US was $7124 per FEU, down by 6.9%. Meanwhile, the rate to the East Coast of the US was $9751 per FEU, decreasing by 1.3%.
Industry insiders believe that the main factor affecting this rate adjustment is the increase in capacity. Since early July, continuous new capacities have been added on the US route. The addition of extra sailings and new shipping companies has gradually led to a pullback in rates for the US route. As a result, it is expected that rates for this route will continue to fall in late July.
The high rates for European and American routes attracted a large influx of additional sailings into the market, as well as the launch of new route services to compete for cargo, significantly impacting the rates over the past two weeks due to the continuous increase in capacity supply.
Latest Top 20 Capacity Ranking
According to the latest data from Alphaliner, as of July 19th, 2024, there are a total of 7022 container ships operating globally, with a total capacity of approximately 30.266 million TEU.
The top three in terms of capacity are Mediterranean Shipping Company (MSC), Maersk Line, and CMA CGM, with MSC's current capacity exceeding 6 million TEU and holding a market share of 20%.
The shipping companies ranked from 4th to 10th place are: COSCO Shipping, Hapag-Lloyd, Ocean Network Express (ONE), Evergreen Marine, HMM (Hanjin Shipping), ZIM Integrated Shipping Services, and Yang Ming Marine Transport Corporation.
Although July to August is traditionally the peak season for shipments, this year's peak season began earlier, making it difficult to see another surge in shipment volumes from August to September. However, some believe that even though sea freight rates have peaked and begun to fall back, the extent of the decrease is expected to be limited.