Freight rates for exporting containers from China in Week 14 through the ongoing novel coronavirus (Covid-19) pandemic impacted both tonnage supply and demand.
While demand for moving shipments from China decreased slowly, the supply-demand balance managed to improve thanks to reductions in tonnage supply resulting from service suspensions by ship operators.
In addition, some shipping lines had planned to implement rate hikes in early April, keeping the general index from going down further. The Shanghai Shipping Exchange (SSE) unveiled on 3 April that the Shanghai Containerized Freight Index (SCFI) for the week in question, as such, rose slightly by 0.1% from the previous week to 890.37 points.
In Europe, many shipping companies endeavored to maintain their freight rate standards, but minor rate cutdowns by some operators impacted the market more powerfully. The spot rates for containers from Shanghai to Europe fell by 1.8% to US$750/TEU. On the route to the Mediterranean, demand was weaker than a year earlier and the freight rate on the route went down 1.9% to US$863 per TEU.
On the trade to North America, some carriers raised freight rates for containers bound for the west coast, followed by many, but on the route to the east coast, operators employed different strategies. The rates for services to the east and west coasts were US$2,782/FEU and $1,662/FEU, down 0.9% and 9.7%, respectively.
On the trade route to the Middle East Gulf, it was once expected that container movement to the region would increase, as Ramadan is scheduled for late April in Islamic states. In fact, the cargo flow was not as brisk as expected owing to the Covid-19 outbreak. As a result the freight rate for containers from Shanghai to the Middle East plunged 10.8% to US$896/TEU.
Container movement was stable on the route to Australia and New Zealand, and the freight rate from Shanghai to these destinations improved by 2.1% to US$918/TEU.
On the trade from China to South America the container rate market remained on a steep downward trend. The spot rate plummeted 14.6% to US$1,114/TEU, going down for 12 weeks in a row. Over the 12 weeks, the rates decreased by 50.2% in total.
Transport demand was stable on the trade to Japan, bringing about a minute improvement to the market. The container rates to Kansai and Kanto were US$233/TEU and US$240/TEU, respectively, both of which remained unchanged from the previous week.
