The Christmas shipping peak season has ended, and with weak market cargo volume, container shipping rates have once again declined.
According to the latest data released by the Shanghai Shipping Exchange on December 5, the Shanghai Export Containerized Freight Index (SCFI) fell by 5.5 points to 1,397.63 points last week, marking a weekly decline of 0.39%. Among the four major long-haul routes, freight rates for three of them declined, with only the Mediterranean route experiencing an increase.
Last week, freight rates from the Far East to the U.S. West Coast fell by $82 to $1,550 per FEU, a weekly drop of 5.02%. Rates from the Far East to the U.S. East Coast declined by $113 to $2,315 per FEU, down 4.65% for the week. Rates from the Far East to Europe decreased by $4 to $1,400 per TEU, a decline of 0.28%. In contrast, rates from the Far East to the Mediterranean rose by $68 to $2,300 per TEU, an increase of 3.05% compared to the previous week.
On regional routes, freight rates from the Far East to Japan's Kansai region remained unchanged from the previous week at $312 per TEU, while rates to Japan's Kanto region also held steady at $321 per TEU. Rates to Southeast Asia increased by $3 to $543 per TEU, and rates to South Korea stayed unchanged at $143 per TEU.
Industry insiders noted that cargo volumes on U.S. routes have been low, while container ship capacity continues to expand, creating dual pressures that have dragged down freight rates. By late November, rates had dropped to as low as $1,300 per FEU, which is the breakeven point for many shipping companies. To prevent rates from falling further, shipping companies attempted to raise prices by about $600 in the first week of December. However, due to insufficient cargo volume, prices initially rose before declining again. Currently, rates on the U.S. West Coast route stand at around $1,500, while rates to the U.S. East Coast are approximately $2,200.
Although the market is in a low season, shipping companies have not significantly increased blank sailings. Reportedly, major alliance members are focusing on capturing market share. While the listed rate for the U.S. West Coast route is around $1,500/FEU, special rates of about $1,350 are offered to secure major clients or maintain vessel utilization, indicating that a rate war may be imminent.
Currently, container shipping demand remains sluggish, with China's overall load factor hovering around only 70%. For U.S. route rates to rebound, it is estimated that the market may need to wait until late December or early January, ahead of the Chinese New Year, when Asian shipments and Western restocking typically increase. At that time, both cargo volume and freight rates are expected to recover. On the other hand, although the long-haul routes are in a low season, some optimists believe that strong demand on regional routes could help alleviate the off-season pressure on Europe-U.S. routes to some extent.
Clarksons' data shows that the global container ship fleet officially surpassed 7,000 vessels in early November, reaching 7,007 ships with a total capacity of 32.7 million TEUs. Over the past 37 months, the fleet has grown by more than 1,000 ships, with an increase of 16.67% in the last three years, marking the fastest growth rate in history. Meanwhile, global container ship order books exceeded 10 million TEUs in early September this year, with 991 new ships scheduled for delivery by the end of 2028. The global container ship fleet is expected to exceed 8,000 vessels in the next three years.
