Freight prices keep falling! Many shipping companies have begun a new round of price increase plans
According to Linerlytica, a shipping consulting firm, in its latest "Market Pulse" market report, if container shipping companies do not take measures to control shipping capacity, container freight rates may fall to 2016 due to sluggish demand and excess shipping capacity. year level.
01 Shipping costs are already below 2019 levels
Linerlytica reported that container freight rates on the Asia-Europe route are already lower than 2019 levels, and unless the container shipping industry begins to implement strict capacity management, freight rates on this route may fall to 2016 levels.
The most recent Drewry World Container Index (WCI) report (released on September 28) showed that the index fell 5.1% last week to $1,404.38/FEU.
Drewry stated that this figure is down 65% compared with the same period last year, and is 1% lower than the average freight rate in 2019 (before the epidemic) of US$1,420.
The British shipping consultancy also said that the average composite index so far this year is US$1,747/FEU, which is US$932 lower than the 10-year average freight rate of US$2,678.
02 A new round of price increase plans
Recently, shipping companies have started a new round of price increase plans. CMA and Hapag-Lloyd have successively issued price adjustment notices for some routes, announcing increases in FAK rates in Asia, Europe, the Mediterranean, etc...
Hapag-Lloyd raises FAK rates from Far East to Northern Europe and Mediterranean
On October 2, Hapag-Lloyd issued an announcement stating that from November 1, it will ban 20-foot and 40-foot containers (including high cabinets and refrigerated containers) from the Far East to Europe and the Mediterranean (including the Adriatic Sea, the Black Sea and North Africa). The FAK rate will be increased for goods transported in boxes).
Hapag-Lloyd raises Asia to Latin America GRI
On October 5, Hapag-Lloyd issued an announcement stating that the general freight rate (GRI) for cargo from Asia (excluding Japan) to the west coast of Latin America, Mexico, the Caribbean and Central America will be increased soon. This GRI applies to all containers from October 16, 2023, and is valid until further notice. A 20-foot dry cargo container costs US$250, and a 40-foot dry cargo container, high container, or refrigerated container costs US$500.
CMA raises FAK rates from Asia to Northern Europe
On October 4, CMA announced adjustments to FAK rates from Asia to Northern Europe. Effective from November 1, 2023 (shipping date) until further notice. The price will be increased to US$1,000 per 20-foot dry box and US$1,800 per 40-foot dry box/high box/refrigerated box.
CMA raises FAK rates from Asia to the Mediterranean and North Africa
On October 4, CMA announced adjustments to FAK rates from Asia to the Mediterranean and North Africa. Effective from November 1, 2023 (shipping date) until further notice.
Summarize:
The main contradiction in the market at this stage is still the lack of significant increase in demand. At the same time, the supply side of transportation capacity is facing the continuous delivery of new ships. Shipping companies can only take measures such as proactive and continuous reduction of transportation capacity to gain more gaming chips.
In the future, more shipping companies may follow suit, and there may be more similar measures to increase shipping rates.