December 25, 2024 – Source: Foreign Shipping News
The latest Shanghai Containerized Freight Index (SCFI) reveals that freight rates have increased for the fourth consecutive week, with the index reaching 2390.17 points on December 20, marking a 0.24% rise compared to the previous week.
Notably, freight rates from the Far East to the U.S. West Coast and East Coast saw significant increases of over 4% and 2%, respectively, while rates for European and Mediterranean routes saw slight declines, with decreases narrowing to 0.57% and 0.35%.
This price hike partially reflects the impact of mid-December rate adjustments. Particularly, the U.S. West Coast benefited from concerns over a potential strike at East Coast ports, which led to a shift in orders. As the Lunar New Year approaches, continued factory shipments and tight capacity further contributed to the rising rates.
North American freight rates are also being influenced by ongoing labor negotiations at East Coast ports, with a deadline for an agreement set for January 15, 2025. Disputes between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) over automation issues, coupled with support for anti-automation stances from U.S. President-elect Trump, have added to the challenges in negotiations, keeping North American freight rates high.
Industry experts suggest that the risk of a strike at East Coast ports remains, and both East and West Coast U.S. routes are likely to maintain strong rates.
This week, the U.S. West Coast rate is around $4,450 per 40-foot container, up approximately $2,000 from early December. The U.S. East Coast rate is around $5,900 per 40-foot container, an increase of about $1,200 compared to earlier this month. With carriers starting to ship before the Lunar New Year, capacity remains tight.
European routes are quoted between $4,900 and $5,200 per TEU this week, as clients continue to ship before the Lunar New Year holiday.
Freight Rates Expected to Rise Further After New Year
According to freight forwarders, U.S. and European rates could rise even further after the New Year. As Asia prepares for the Lunar New Year, a surge in demand has already been observed. Not only are Far East-to-Europe and Far East-to-U.S. rates climbing, but there is also strong demand on short-haul routes.
Major U.S. carriers have announced price hikes ranging from $1,000 to $2,000, while Mediterranean Shipping Company (MSC) has set January rates at $5,240 per TEU, a modest increase. Maersk’s rates for the first week of January are slightly below December’s final week, but will increase to $5,500 in the second week.
This could be linked to the upcoming February restructuring of the shipping alliances, with European carriers aggressively competing for customers.
Additionally, Wan Hai’s General Manager, Hsieh Fu-long, highlighted several factors driving rates higher, including a lack of consensus between dock workers and management, high demand for container ship charters, congestion at ports, and challenges arising from larger vessels.
Charter rates for 4,000 TEU ships have nearly doubled compared to last year, and the global idle vessel rate has hit a historic low of just 0.3%.
Furthermore, uncertainty surrounding the new U.S. presidential administration’s tariff policies remains a key concern for the market. Historically, such uncertainty has led to a rush in shipments ahead of tariff changes.
SCFI Freight Rates:
- Shanghai to Europe: $2,946/TEU, down $17 (-0.6%)
- Shanghai to the Mediterranean: $3,733/TEU, down $13 (-0.3%)
- Shanghai to U.S. West Coast: $4,198/FEU, up $175 (+4.3%)
- Shanghai to U.S. East Coast: $5,642/FEU, up $148 (+2.7%)
- Persian Gulf: $1,429/box, down $78 (-5.2%)
- South America (Santos): $5,351/box, down $257 (-4.58%)
- Southeast Asia (Singapore): $711/box, down $14 (-1.93%)
China Top Forwarder Disclaimer: This article is a reprint from other media sources and is provided for informational purposes. It does not constitute endorsement or confirmation of the views expressed in the article.