Freight rates fell across the board! The sky-high freight is about to cool down?

The Shanghai Shipping Exchange has released a new phase of the export container freight index. Among them, the Shanghai export container freight index has dropped almost across the board, encompassing the fastest-rising European and Western US routes since the end of 2020.

Therefore, the sky-high freight rates have been on fire for more than half a year. Is this going to start to cool down?

According to the freight index, it is only the Shanghai export container freight index that dropped this time, which dropped by about 0.6%. The basic European ports fell by 0.4% month-on-month, the Western United States fell by about 1.5%, and the Eastern United States fell by about 1%. West Africa, South Africa, South America is also falling.

Although the overall decline was not large, it was a sight that shipping people hadn't seen for a long time. It's no wonder everyone paid extra attention to this data.

It is worth noting that the Shanghai Export Container Freight Index does not represent other freight rate trends across the country. According to the China Export Container Freight Index, it has risen by 5.5% as a whole. The route continues to rise.

It is understood that from October to November 2020, shipping companies rejected American agricultural export containers worth hundreds of millions of dollars, and chose to ship empty containers to China, thereby increasing China's container exports.

The shortage of container equipment that has lasted for several months is expected to be alleviated. It may become a turning point in the Chinese New Year. The 20-foot and 40-foot dry container indexes have increased to 0.34 and 0.37, respectively, indicating that the availability of empty containers is much higher than last month.

Over the past few months, there has been an extreme shortage of containers across China. Shanghai, which has always been in short supply, has been extremely severe. As China’s container manufacturing plants are running at full capacity to expand production capacity, and shipping companies are trying their best to ship empty containers back to China, Chinese New Year may become important Turning point.
With the substantial increase in container supply, Shanghai Port's container availability index is returning to normal levels. Other ports in China are also undergoing positive changes.

Taking Qingdao Port as an example, the availability index of a 20-foot container even reached 0.5. The container availability index of other major Asian hub ports such as Singapore Port, Navassiwa Port and Port Klang also showed the same trend.
Compared with December 2020, the availability index of standard containers at the Port of Singapore in January 2021 has increased by 58%, Port Nawahiwa has increased by 35%, and Port Klang has increased by 54%.

There are signs that the container availability index will remain stable in the next few weeks. Until mid-February, the availability of 20-foot containers will stabilize at around 0.35 and the availability of 40-foot containers at around 0.38.

One to three months after the Spring Festival, a large number of empty containers in Europe and the United States will be shipped back one after another, the shortage of containers will be alleviated, and the freight rate will gradually return to normal levels.