The post-holiday market has been plagued by a low season, a significant shortage of cargo, and at the same time, overcapacity and increased competition have combined to suppress freight rates. The latest edition of the Shanghai export container Freight Index (SCFI) fell again by 2.28% to 1732.57 points, which is the sixth consecutive week of decline, a cumulative decline of nearly 22%. Nevertheless, compared with last December when the Red Sea crisis, the freight rate still maintained a 71 percent increase.

It is particularly worth mentioning that the freight rate of the West American route and the European route has doubled, and most of the ships can remain above the profit level. Among them, the European route and the Mediterranean route are affected by multiple factors such as the Red Sea crisis and carbon emissions, and shipping costs are rising, but the decline has narrowed this week, respectively, 1.42% and 3.02%, showing relatively strong resilience. In contrast, the US-West route fell 4.1% weekly, and the US-East route fell 7.81% weekly, becoming the only route with an expanded decline.

It is worth noting that the United States Line began to attract non-alliance small ship companies to join, through the price reduction strategy to compete for supplies, adding more variables to the market. At the same time, in the case of the suspension of direct services in the Red Sea region by most shipping companies, the market recently reported that the Houthi armed forces promised to guarantee the safe passage of Chinese and Russian ships in the Red Sea and the Gulf of Aden. This news has also attracted many small shipping companies to take the opportunity to enter the Red Sea market, trying to seize the opportunity.

However, the intensification of market competition and the downturn in demand after the holiday are still the key factors for the weak increase in freight rates. Freight forwarding industry insiders said that although the domestic has been fully resumed work, but the inflation pressure in Europe and the United States has not been significantly eased, and the high interest rate environment continues to affect the consumption capacity. In the face of the upcoming U.S. line long contract expiration date (April 30), shipping companies in order to sign a more favorable long contract price and stabilize the basic order, have taken measures to reduce the number of classes, regulate shipping space, etc., to ease the downward pressure on freight rates, and look forward to a gradual recovery in demand.

According to the latest weekly quotation data of SCFI, the freight rate per 20 feet container of Shanghai to Europe route is $1943, down $28, the weekly decline is 1.42%; On the Mediterranean route, freight rates per 20-foot container were $2,887, down $90 for a weekly decline of 3.02 percent. The freight rate per 40 feet container from Shanghai to the West of the United States was 3,621 US dollars, down 155 US dollars, a weekly decline of 4.10%; The price per 40-foot container to the East of the United States is $4,842, down $410, a weekly decline of 7.81%.