Date: Thursday, September 22, 2023
Source: Splash 247
The Shanghai Containerized Freight Index (SCFI) fell another 4% today, the key box spot index remaining stubbornly below 1,000 points at 911.71 points.
Likewise, Drewry’s World Container Index, another composite spot indicator, fell 5.2% to $1,479.48 per feu, albeit it remains 4% higher than average 2019, pre-pandemic rates.
Rates from Asia to North Europe and the Mediterranean have come under severe pressure this month, down by 30% in the space of 30 days according to Lars Jensen, founder of consultancy Vespucci Maritime.
“Container market sentiment continues to deteriorate, with freight rates still slipping with little prospects for a rate rebound in October despite carriers’ efforts to contain capacity availability through blanked sailings,” the latest weekly report from Asia-based consultants Linerlytica suggested.
The planned capacity cuts over the Golden Week holidays in October are still smaller than the capacity removed during the Lunar New Year holidays in February this year, according to Linerlytica, claiming they are insufficient to stem the rapid rate decline.
“Looking ahead, it appears that ocean carriers are taking a cautious approach. Global forwarders are cautioning about a notable rise in blank sailings anticipated for the fourth quarter on the trade routes from Asia to North Europe and the Mediterranean. The continuous expansion of shipping capacity, driven by the introduction of new mega-vessels, is outstripping the existing demand, leading to considerable strain on already oversupplied trade lanes,” Container Xchange warned in a report this week.
Blank sailings already account for 16% of mainline capacity according to Drewry.
“Blanked sailings – often announced at the last minute – will mean poorer schedule reliability,” observed Judah Levine, head of research at Freightos.
The muted outlook is taking its toll on the chartering side too with Braemar noting prompt tonnage availability is further increasing and it is anticipated that operators will chase for new benchmarks across all segments.