The freight rate increase has slowed down, will the freight rate on European and American routes peak in July?

Sunny Worldwide LogisticsIt is a logistics company with more than 20 years of transportation experience, specializing in markets such as Europe, the United States, Canada, Australia, and Southeast Asia. It is more of a cargo owner than a cargo owner~

Recently, the freight rate trend in the shipping market has become the focus. Senior sources from Asian shipping companies revealed that the freight rate on the Mediterranean route was originally planned to increase to US,400 per large box in the middle of this month, but the actual increase only reached US,000, indicating that the freight rate on this route may be close to its peak. This forecast is mainly based on the fact that Mediterranean ports do not have as much cargo volume as major European ports. For European and American routes, with the increase in the number of flights, it is expected that the freight rates on July 1 will be close to the peak after adjustment. However, senior executives of European shipping companies believe that although freight rates are still likely to rise, confidence in future increases is no longer as strong as in the past, and July will be a key moment to observe market trends.

A large freight forwarding company pointed out that the number of ships returning to Asia increased significantly at the end of June and early July, and the supply of shipping capacity increased significantly. In addition, if the peak season starts early, it may end early. However, shipping companies still stabilize freight rates through cabin control. In addition, The problems of port congestion and container shortage still exist, and the union negotiations between the two major railway companies in the United States and Canada are not optimistic. It is still difficult to predict that freight rates will reach their peak in July.

After all, the shipping market is profoundly affected by geopolitical factors, and the current congestion problem in the entire shipping supply chain cannot be solved in the short term. Therefore, while freight rates may stagnate in August, they are expected to remain at relatively high levels. For shipping companies, this trend remains positive for revenue contribution in the third quarter (Q3).

An executive from another freight forwarding company said that the current shipping market situation is complicated. The situation in the Middle East is tense and shows no signs of easing. Israel has even clashed with Hezbollah in Lebanon, bringing uncertainty to regional stability. At the same time, port congestion is a serious problem. In addition to Singapore and China, the Netherlands, Germany and other places are also facing serious port congestion. In order to cope with the shortage of shipping capacity, some shipping companies choose to add more ships, but these ships often operate alone and are not shared with other alliance members. They call at fewer ports and have relatively smaller tonnage.

Due to factors such as port congestion and detouring around the Cape of Good Hope, sailing times have become difficult to control, and natural sailings often occur. In addition, the EU's decision to impose tariffs on electric vehicles has also affected the shipping market. In order to avoid potential tariff risks, exporters rushed to increase shipments before the results of the November survey were released, which to a certain extent promoted the increase in freight rates.

However, there are still some key factors that need to be observed in order to influence freight rates and stop them from rising or even falling. First, if the EU immediately announces additional tariffs on Chinese electric vehicles, Chinese exporters may reduce shipments, thereby reducing the push for freight rates. Secondly, the purchasing power of end consumers is also an important factor affecting freight rates. If consumer purchasing power drops significantly, freight demand will decrease, thereby affecting freight rates. Finally, if shipping companies significantly increase shipping capacity supply, it may also lead to a drop in freight rates.

Despite these uncertainties, there is still room for price increases on July 1. Especially whether the European route will rise to US,000 as planned by Maersk and Mediterranean Shipping MSC, next week will be a key decision moment.

Shipping industry experts pointed out that the SCFI index has risen for 11 consecutive times, and freight rates on the four major routes and Southeast Asian routes are all on the rise, with prices close to the highs during the epidemic. It is normal for the increase to decrease or decrease, but attention should be paid to whether the decrease expands. Currently, the market generally expects that as long as the Red Sea crisis continues, although freight rates may be revised, the room for a sharp drop is relatively limited.

Industry insiders believe that the container shipping market is facing two major potential instability factors that will continue to affect the supply and demand balance of global container ships. First of all, the continuation of the Palestinian-Israeli conflict has blocked the Red Sea route, causing a major reversal in global container ship supply and demand. Secondly, the labor negotiations at the US East Terminal have been protracted and the pressure for slowdowns is increasing, further exacerbating market uncertainty.

In addition, congestion at the Singapore port is also increasing, leading to the early arrival of this year's peak shipping season and driving up freight rates. Analysts believe that this may mean that the peak season will end early, and the high freight rates are expected to gradually ease in September.