Overcapacity! SCFI Index Falls for Two Consecutive Weeks

The fundamental situation of oversupply in the container shipping market remains unchanged, with the Shanghai Containerized Freight Index (SCFI) continuing to decline last week.

According to the latest data released by the Shanghai Shipping Exchange on January 16, the SCFI index dropped 73.27 points to 1574.12 points last week, with the weekly decline widening to 4.45%. Among the four major ocean routes, freight rates rose slightly only on the US East Coast route, while rates on the other three major ocean routes all fell.

• The freight rate from the Far East to the US West Coast fell by $24 to $2,194 per FEU, a weekly decrease of 1.08%.

• The freight rate from the Far East to the US East Coast rose by $37 to $3,165 per FEU, a weekly increase of 1.18%.

• The freight rate from the Far East to Europe dropped by $43 to $1,676 per TEU, a weekly decrease of 2.5%.

• The freight rate from the Far East to the Mediterranean fell by $249 to $2,983 per TEU, a weekly decrease of 7.7%.

• The freight rate from the Far East to Kansai, Japan remained unchanged at $312 per TEU.

• The freight rate from the Far East to Kanto, Japan stayed the same at $321 per TEU.

• The freight rate from the Far East to Southeast Asia decreased by $9 to $515 per TEU.

• The freight rate from the Far East to South Korea rose by $2 to $144 per TEU.

Industry insiders stated that the growth rate of container ship capacity still outpaces the growth of actual cargo volume, and short-term freight rates continue to be affected by the overall supply of capacity. Even though there is some demand for cargo shipments before the Spring Festival, it will be difficult to fully absorb the excess supply in the short term. Before the market supply and demand return to full balance, the short-term market will mainly be dominated by volatile consolidation.

From January 15 to 21, the freight rates of alliance routes remained relatively stable overall: the US West Coast route was around $2,000 to $2,100, the US East Coast route was about $3,000 to $3,100, and the Europe route was roughly $2,300 to $2,600. In late January, container shipping companies plan to raise freight rates on Pacific routes, with an estimated increase to about $3,100 for the US West Coast and $4,100 for the US East Coast, reflecting their price expectations for the subsequent market. However, the actual performance will still depend on cargo volume

Market sources indicate that major shipping lines such as MSC have notified special customers of preferential policies of no price increases before the Spring Festival, hoping to secure more cargo by offering early price cuts and increase load factors.