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Shanghai is gradually returning to normal. Can it drive the recovery of freight rates?

Time:2022-05-18 Publisher:Kevin Num:2728

Since the beginning of 2022, the spot freight rate has been in a downward trend for 17 weeks. The emergence of this phenomenon is closely related to the decline of the demand for maritime container transportation.

Industry insiders generally believe that the rising sea freight in the past two years has gradually declined after the Spring Festival this year, and the average has fallen by about 20% so far.

The freight rate between China and West America has fallen by more than 30%, and the decline on the European line is even greater. 

On the 9th of this month, the freight rate per 40 foot container between Asia and West America was $12104, the lowest level since July last year.

The epidemic situation in Shanghai has improved, and the freight rate is expected to stop falling

Although the latest Shanghai export container freight index (SCFI) fell for 17 consecutive weeks, the freight rate of the western US line has stopped falling and rebounded.

According to the data released by Shanghai Airlines exchange, the SCFI index was 4147.83 points last week, down 15.91 points or 0.38% from the previous week, falling to the low point since late July last year.

The cumulative decline of SCFI index since this year is 18.82%, which is mainly dragged down by the decline of 24.65% in European line freight rate, while the decline of 10.76% in American east line freight rate and 1.18% in American west line freight rate is relatively limited.

But, last week, the freight rate from the Far East to the western United States rose to $7900 per feu.

Industry insiders pointed out that the freight rate of the US west route has gradually picked up, mainly because Shanghai has successively unsealed and some goods have been transported to the US West, driving the freight rate to rise slightly.

Generally speaking, it is normal for goods exports to decrease during the Spring Festival holiday. Then the freight rate will go down and stop falling and pick up after about 12-13 weeks. But this year has been 17 consecutive weeks of decline.

However, at present, the freight rate is still at a high level. As long as the freight rate decreases by no more than 50%, the centralized transportation company can still ensure high profits.

Industry analysts said that the recent freight rate trend of various routes showed that the demand of the United States was still strong.

The US west line freight rate has been stable since May, and then rebounded slightly. Once China accelerates the resumption of work and shipment, the transportation demand is expected to rise rapidly.

Besides, labor negotiations between American and Western workers are underway, and the freight rate is expected to stop falling and rise by the end of May.

In terms of air freight, nearly half of the 34 all cargo aircraft shipping companies operating at Pudong Airport have recovered their capacity to more than 80%,

There are more than 8 core operators working with China Unicom in the Asia Pacific and Pudong airports.

On the other hand, the recent daily traffic volume of trucks in the freight area of Pudong Airport has reached more than 3600 vehicles, with an average daily delivery volume of about 3000 tons, a significant increase compared with the same period in April.

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