What impact will the Shanghai epidemic have on shipping?

The severe epidemic situation in Shanghai and the continuous impact on the container shipping market caused by the global congested ports, the SCFI index has fallen for 12 consecutive years, hitting a new low since August last year.

On April 8, the Shanghai Shipping Exchange announced that the latest Shanghai Export Containerized Freight Index (SCFI) fell to 4,263.66 points, a weekly drop of 1.96%, setting a record for 12 consecutive weeks of declines. The freight rates of the European line and the west line of the United States both fell, and the freight rate of the European line reached a new low in 10 months, but the east line of the United States stopped falling and rebounded.

Among them, the freight rate per FEU from the Far East to the US West line fell by US$56 to US$7,860, or 0.7%, and fell for 5 consecutive weeks and hit a new low this year. %; the freight rate per TEU for the Far East to Europe line fell to US$6,157 for 11 consecutive years, the lowest since June last year

Industry insiders pointed out that recently, in order to prevent the strike of the wharf workers in the west of the United States, manufacturers began to forward the goods to the east of the United States. However, the shipping space in the east of the United States is less than that of the west of the United States, and the problem of port congestion has not been solved, so the east of the United States has pushed up the freight rate.

In terms of the overall freight rate trend, it is expected that the freight rate will still drop slightly in mid-April. The freight rate that was originally expected to recover in the second half of April may now start to rise only in early May. The main reason is that container shipping companies have begun to pump ships on the US West Line, and after the unsealing of the epidemic in Shanghai and other places, the wave of shipments can be expected, which will push up freight rates.

Although the SCFI index fell continuously, the freight rate was actually still at a historically high level. However, people in the industry also believe that the freight rate may not be able to reach a new high again. This year, the freight rate is unlikely to increase as much as last year, but it will not decline too much, but will remain at a high level and fluctuate.

On the other hand, although the current situation of the scarcity of space has eased, the slightly loose space and the ease of port congestion will help to increase the turnover rate of ships. Even if the freight rate drops slightly, as long as the cargo volume maintains a high level, the freight rate will also increase. Maintaining a relatively high level, the performance of container shipping companies this year may not be lower than last year.

About 10% of the world's container ship fleet is immobilized due to port congestion in China and other parts of the world, according to Ocean Networking Shipping (ONE).

ONE CEO Jeremy Nixon said at the Marine Money conference in Singapore on April 5 that container ships are stuck waiting in congested areas and consume a lot of fuel. If the bottleneck can be solved, services can be made on time again.

According to the U.S. Department of Agriculture, there were 5,587 ships in the global container fleet last year, carrying a total of 24.7 million containers.

The new crown epidemic has entered its third year, and the global supply chain is still affected by labor constraints and outbreaks. While port congestion on the U.S. west coast has finally eased after months of delays, blockades in cities such as Shanghai and Shenzhen have led to increasing queues for ships off China's seas, which could slow cargo shipments in the coming months, industry insiders said. Delays get worse and will push up shipping rates