The freight on European routes has dropped to less than $1000!

Since the beginning of this year, SCFI index has dropped by more than 80% compared with its peak in early 2022. People in the shipping industry bluntly say that unless shipping companies substantially adjust their capacity, the freight rate war will continue, and the probability that the two main routes, such as the United States, West and Europe, will fall below the profit and loss line will increase.

Orders from Europe and America and resumption of work in the mainland are not as good as those from intended, and Shanghai Shipping EXP Container Freight Index (SCFI) is about to usher in a thousand-point defense war.According to the latest data on February 3rd, SCFI index continued to fall by 2.22% to 1006.89 points, European and American routes continued to fall by 2%-5%, and Shanghai-Europe routes had fallen below the $1,000 mark.

Shanghai Port EXP to European Base Port MarketFreight rate (InternationalOcean freight and shipping surcharge) was US $961/TEU, down 5.23%;The freight rate from Shanghai to Mediterranean was US $1754/TEU, down 3.41%;The freight rate from Shanghai to the western United States was USD 1,363/FEU, down 2.8%.The freight rate from Shanghai to Meidong was US $2,706/FEU, down 2.77%.

It is reported that Taiwan's shipping industry held a collective New Year's greeting on February 1, and the container duo looked at the market outlook conservatively at the same time.Among them, Zhang Yanyi, chairman of Evergreen Shipping, warned that with the delivery of a large number of newly built large container ships this year, if consumption cannot keep up with the growth of capacity, liner operators may face another shipping price war.

After two years of amazing profits, the liner industry faces three major challenges this year, one is the slowdown of economic growth in International and the world, and the other is Container, "Zhang said at the eventImmediateFreight rateDecline;Many have new boats launched this year. "

"If the economy fails to keep up with the growth in capacity supply, liner operators may start a price war, which is the most unfortunate situation in our industry unless we can significantly adjust capacity," Mr Zhang said.If the freight war continues, the profits of important routes such as Trans-Pacific, Asia and Europe will inevitably fall below the risk of balance of payments.Even small shipping companies will lose money.

"If the Russian-Ukrainian conflict ends, it is expected to ease inflation and energy crisis and stimulate the market to return to normal consumption, which is the most important thing for the shipping industry," Zhang Yanyi added.

However, Zheng Zhenmao, chairman of Yangming Shipping, pointed out that from the perspective of the overall economy, many data are currently developing in a good direction, including the International Monetary Fund slightly raising the global economic growth intended this year;0.2%;After the mainland was unsealed, it fought for the economy.Although there are not many ports at present, the effect still needs time to observe;The Federal Reserve seems to be raising interest rates.It seems that the peak is coming soon.In addition, industries such as technology will lay off employees and clear inventory.All the bad news was expected.

Zheng Zhenmao stressed that although he did not see strong signs of economic recovery, he felt that market panic was weakening.If the overall economic environment continues to improve and consumer demand picks up, the shipping market will have more opportunities for improvement in the second half of the year than in the first half of the year.

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