The Shanghai Containerized Freight Index of Europe service (basic ports) dropped by 10.9% w/w to 1,773.60

The Shanghai Containerized Freight Index of Europe service (basic ports) dropped by 10.9% w/w to 1,773.60

The Shanghai Containerized Freight Index (SCFI) for Europe service (basic ports) dropped by 10.9% week-over-week (w/w) to $1,773.60, according to the latest data [1]. This decline is part of a broader trend of weakening container spot freight rates on major east-west deepsea trades, driven by weak demand and excess supply of slot capacity.

The SCFI’s Shanghai-US west coast base port leg saw spot rates increase 17% w/w, to end at $1,923 per 40ft, while its Shanghai-US east coast base part leg was up 10%, to $2,866 per 40ft. However, these increases were offset by a 3% decline in the World Container Index (WCI) from Drewry for the Shanghai-Los Angeles leg, which ended the week at $2,332 per 40ft [1].

The drop in SCFI for Europe service highlights the volatility in container shipping rates, with various indices showing contrasting trends. The NCFI, which measures its index on points rather than $, recorded a 45% w/w rise in spot rates to the US west coast, and a 25% w/w increase on US east coast shipments [1]. These increases could be attributed to optimistic expectations about the upcoming general rate increases (GRIs) or rising demand prior to China’s Golden Week holiday.

Peter Sand, chief analyst at Xeneta, noted that spot rates have now hit a level that is dragging carriers into loss-making territory. He stated, “Further gradual decline means spot rates are moving closer to pre-Red Sea crisis levels. The last time we saw rates this low, prior to escalation in the Red Sea, carriers were posting big losses” [1].

Asia-Europe spot rates also continued their descent. The XSI’s Far East-North Europe leg shed 3.6% w/w, to end at $2,811 per 40ft, while the WCI’s Shanghai-Rotterdam leg lost 10%, to finish the week at $2,661 per 40ft [1].

Sand emphasized that shippers should focus on the upcoming annual contract negotiations later in the year, rather than dwelling on the higher freight rates they paid. “It is important shippers do not look back in anger at the higher freight rates they paid, they cannot recoup this money. Instead, they should be looking forward to the next tender season as an opportunity to strike a better freight rate as well as enhanced service delivery,” he said [1].

References:
[1] https://gcaptain.com/spot-rate-slump-threatens-to-sink-carrier-profits/