The five major shipping companies raised freight rates!

According to industry sources, major global shipping companies, including COSCO, MSC, CMA CGM, Evergreen and ONE, are planning to raise freight rates on their US West Coast and East Coast routes from August 15, with an estimated increase of between 9% and 15%.

It is said that several large container shipping companies have notified customers that the US West Coast and US East Coast rates will increase by US$1,000 on August 15, but Maersk's online freight rates have not increased until the end of this month, and non-shipping alliances have dropped to US$4,500-4,600, making it difficult to increase prices.

Although the container shipping market has recently shown a mixed trend of long and short positions, the most intuitive reflection is that the Shanghai Containerized Export Freight Index (SCFI) has fallen for four consecutive weeks, with a monthly correction of 10%, and fell 3.3% to 3,332.67 points in the most recent week.

Specifically, the freight rate from the Far East to the West Coast of the United States fell sharply by 6.3% to $6,425/FEU, becoming the route with the largest drop among the four major indexes, mainly due to the influx of small ships into the market, which intensified competition. At the same time, the freight rate from the Far East to the Mediterranean also fell by 5.2% to $4,997/FEU, ranking second in the decline.

Although the freight rate has been adjusted for a month, the shipping market is still facing a serious shortage of containers and ships, given that the SCFI has risen for 13 consecutive weeks and it is currently the traditional peak season for global container shipping.

The freight rates on the Far East to West Coast route fluctuated sharply, partly because the freight rates on this route were too high, which attracted near-sea route operators to invest in small ships to join the competition, thereby lowering the freight rates. 

In addition, the tense situation in the Middle East and the gradual increase in freight volume after mid-August were also important factors that prompted the five major shipping companies to decide to increase freight rates. 

However, it is worth noting that despite the expectation of price adjustments, the current peak season for container shipping is relatively stable, and the traffic capacity of the Panama Canal is gradually returning to normal, and it is expected to be fully restored in September, which will drive the total capacity to 1.6 million TEUs. These negative factors will further put pressure on freight rates.

The major freight forwarding companies have different views on the market freight rate trend, but generally pay attention to the impact of factors such as cargo volume, market demand and shipping company strategies on freight rates. Among them, two large freight forwarding companies clearly pointed out that it is difficult to support the effective increase in freight rates due to insufficient cargo volume. Another company took a wait-and-see attitude, believing that whether the price increase can be successful depends on the actual support of the cargo volume: if some shipping companies have sufficient supply, the price increase may be achieved, but once a ship fails to reach the scheduled loading rate, the freight rate will fall rapidly.

Another freight forwarding company emphasized that the current market demand is not enough to directly drive up freight rates, unless there are emergencies such as strikes by Canadian railway workers and ports in the eastern United States, there is insufficient motivation for freight rates to rise. The last freight forwarding company believes that the opportunities and risks of price increases coexist, and large shipping companies may try to increase freight rates by reducing the number of flights. 

In addition, the current market situation shows that freight rates are still high. Compared with last year, the freight rate data released by SCFI in August showed that the US West Coast line rose from US$2002 to US$6245, and the US East Coast line soared from US$3013 to US$9346, both of which increased by more than three times, showing extremely high profitability. However, shipping companies are worried about the rapid decline in freight rates and are actively planning price increase strategies in order to slow down this trend.

Recently, the freight rates on the US East Coast have fallen sharply. Industry analysts believe that this is mainly due to the fact that Mediterranean Shipping Company and CMA CGM have added overtime services on this route and launched a special price of US$7,500 per LTC. In addition, the Panama Canal's capacity has gradually increased and the ship turnover rate has accelerated, which has jointly increased the decline in freight rates. 

Faced with this situation, European shipping companies are actively preparing for the price increase plan on August 15, and its success or failure is expected to become clear in the next few days. Asian shipping companies have expressed a more resolute attitude, emphasizing that even if the price increase on August 15 fails, the freight rate will definitely be increased on September 1 to cope with the current situation of rapid decline in freight rates.