Shipping companies reduce cabin capacity, and freight rates on European and continental routes rise!

According to the latest Drewry World Comprehensive Container Freight Index (WCI), which rose by 6%, freight rates from Shanghai to Europe and the Mediterranean both increased significantly by 15%.

The effect of capacity reduction in the global shipping industry continues to reflect, and freight rates stabilize in the off-season. The revenue and profits of shipping companies in the fourth quarter will be affected and will also decrease.

Many freight forwarding practitioners said that European inventories are gradually correcting to a healthy level. Coupled with shipping companies reducing sailings and controlling cabins, some ships were full in mid-December, pushing freight rates to rise for two consecutive weeks.

Previously, many shipping companies raised FAK rates, and freight rates shot up again, with an increase of 300 to 500 US dollars. A number of shipping companies, including Maersk, CMA CGM and Hapag-Lloyd, issued notices that they will significantly increase FAK rates on routes from Asia to Northern Europe and the Mediterranean starting from January 1, 2024.

According to overseas industry media reports, other shipping companies will follow suit in the coming days and increase FAK rates by a similar amount in order to establish a solid financial foundation at the beginning of 2024.

During this period, more and more shippers have reported that they are no longer able to book space for December on the shipping company’s online booking platform, mainly because the shipping company is trying to squeeze the market by canceling about 40% of flights from China.