CHINA~AMERICAN AND CHINA ~ EURO ROUTE FREIGHT HIGHER UP CRAZILY

CHINA~AMERICAN AND CHINA ~ EURO ROUTE FREIGHT HIGHER UP CRAZILY 

After shipping lines canceled shipment, it’s lack of space and container, sea freight increased by about US$1,000 this month.

The latest Deluri Composite Freight Index has achieved a month on month increase for the first time since February, with an increase of 1%.

In this period, the freight rates for Asia to Europe and the Mediterranean routes have increased by 2% and 3% respectively, increasing in two consecutive weeks. However, the freight rates for the Trans Pacific and Trans Atlantic routes have remained stable month by month.

 

Due to the ongoing attacks by the Housai armed forces in the Red Sea region, the container shipping market has made adjustments to avoid the Red Sea and detour around the Cape of Good Hope. Although this adjustment has to some extent alleviated the initial backlog and congestion crises, the continuous adjustment of operating methods has still brought some interference.

Given the unresolved situation in the Red Sea and the geopolitical situation in the Middle East, it is expected that freight rates will remain high. Deluri predicts that freight rates will further increase in mid May.

At present, the European and American shipping routes in the consolidation industry have successfully achieved this significant price increase on May 1st, and the shipping company has notified that they will raise the freight rate again on May 15th, with an expected increase of about $1000 per large container.

The price increase this time has brought the freight rates of European routes close to the $5000 mark, while the US West route is expected to break through the $5000 mark in one fell swoop.

 

The main reason why shipping companies dare to push up freight rates intensively is that there are too many empty flights in the industry during the May Day holiday, which leads to the inability of imported goods and empty containers to be delivered to Asia in a timely manner, thus causing serious container shortage problems.

 It is predicted that flights will gradually return to normal starting from the third week of this month, but due to a large backlog of goods in the early stage, it is expected that the freight forwarding company's mid month price increase will be effectively implemented.

At present, the freight rates on the US West route are maintained at around $4100-4200 per large container, while the freight rates on the US East route are between $5200-5600. This year's May Day holiday has not been as dull as in previous years, and the cargo volume has increased. However, due to a shortage of flights, the cabin was fully booked in the first half of May. In the third week, we need to clear the backlog of cargo. It is expected that in order to see market freight rates fluctuate and fall, we may need to wait until the fourth week or even next month.

Given the significant price increase by shipping companies, some freight forwarding companies anticipate that some long-term direct customers may file complaints with the Federal Maritime Commission (FMC) of the United States due to the inability to obtain space. However, similar to the large number of complaint cases during the epidemic, such complaints may not be able to quickly resolve the current problem. The shipping company may indicate that it did not intentionally reduce flights, citing an unexpected increase in arrival volume.