Spot container freight rate index down 10% in a week

Transporting goods by container ship

The September 9 SCFI index stood at 2,562.12 points, down 285.5 points from the level published on September 2, corresponding to a decrease of 10%. The spot container price index fell another 10% after falling 9.7% in the previous week. Thus, the SCFI container price index has decreased by about 18.8% in the past two weeks.

SCFI is currently down by almost half from the record 5,051 points it hit in January of this year.

The Drewry Composite World Container Index (WCI) released on Thursday also showed a continued downtrend but less than the SCFI. The index fell 5% to $5,378.68/FEU from last week. This is the WCI's 28th consecutive weekly decline, down 47% year-on-year in 2021.

Drewry said the steepest drop was seen on the Shanghai-Los Angeles service, down 14% or $780 to $4,782/FEU.

While both indices are still well above historical averages. But it is clear that the continuous increase in spot container freight rates during the time affected by the Covid-19 pandemic is time to face a sharp correction of the market and also affect all prices in long-term contracts.

Bjorn Vang Jensen, Vice President of Advisory Services - Global Supply Chain for Sea-Intelligence, said in a LinkedIn post earlier this week, “I don't know a single medium-large BCO who is not renegotiating right now, or gearing up to do so within the next month.”

Meanwhile, with a more negative outlook, HSBC Global Research has forecast that spot container prices could fall to pre-pandemic levels, although it is important for shipping lines contract prices to remain high than before the pandemic. The net result, however, will be an 80% drop in profits for container lines in 2023/24 from this year's record levels.

See more:

• International shipping and logistics market update - Week 36/2022
• Container ship charter market 'cools down'
• Container freight rates continue to drop sharply on main routes
• Global container shipping industry profits hit a record $63.7 billion in Q2-2022

Source: Phaata.com (According to SeatradeMaritimes)

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