Introduction
As of early June, a new round of price hikes has swept through major shipping companies. The latest comprehensive index from Drewry WCI shows current prices are 198% higher than the average price of $1,420 in 2019 (pre-pandemic). The average composite index for this year to date is $3,323 per FEU, which is $598 higher than the 10-year average of $2,725, influenced by the unique conditions of 2020-2022.
Maersk
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Increased Peak Season Surcharge (PSS) from China, Hong Kong, and Taiwan to Angola, Cameroon, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon, Namibia, Central African Republic, and Chad.
- Effective from June 10, 2024, applicable to 20, 40, and 45 high cube containers from China and Hong Kong.
- Effective from June 23, 2024, applicable to all 20, 40, and 45 high cube containers from Taiwan.
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Increased PSS from Brunei, China, Hong Kong, Vietnam, Indonesia, Japan, Cambodia, South Korea, Laos, Myanmar, Malaysia, Philippines, Singapore, Thailand, and Timor-Leste to UAE, Bahrain, Iraq, Jordan, Kuwait, Oman, Qatar, and Saudi Arabia.
- Effective from June 15, 2024.
- Effective from June 28, 2024, for Taiwan to the same destinations, applicable to all 40 containers.
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Increased PSS for dry and refrigerated containers from South China ports to Bangladesh.
- Effective from June 15, 2024.
CMA CGM
- From June 7, 2024 (loading date) until further notice:
- Origin: China
- Destinations: Northern and Southern West Africa regions (including Liberia, Senegal, Mauritania, Gambia, Guinea, Sierra Leone, Guinea-Bissau, Cape Verde, Sao Tome and Principe, Angola, Congo, Democratic Republic of Congo, Namibia, Gabon, Cameroon).
- Cargo: Dry goods
- Rate: $500 per standard container
COSCO
- Adjusting various Freight All Kinds (FAK) rates from June 15 to June 30, 2024.
Hapag-Lloyd
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Increased PSS from Far East (including Oceania) to Northern Europe and the Mediterranean.
- Effective from June 15, 2024, for all voyages until further notice.
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Rate Increases:
- Shanghai to New York: +6% or $372 to $6,835 per FEU
- Shanghai to Rotterdam: +5% or $271 to $5,270 per FEU
- Shanghai to Genoa: +4% or $199 to $5,693 per FEU
- Shanghai to Los Angeles: +2% or $113 to $5,390 per FEU
- Rotterdam to Shanghai: +1% or $4 to $677 per FEU
- Los Angeles to Shanghai / New York to Rotterdam: Stable
Market Outlook
Drewry anticipates continued increases in export shipping rates from China due to the early arrival of the peak season. Industry insiders report a state of overbooking across the board.
In May, the container shipping market experienced overbooking and significant freight rate increases. Supply and demand dynamics are key factors affecting rate trends. Some believe that if high freight rates and overbooking persist through mid-June, the overall freight rate levels for this year may remain elevated.
From the perspective of shipping companies, many have announced further rate hikes, particularly noticeable on routes to Latin America, Europe, North America, and Africa. The supply chain disruption caused by supply-demand mismatches will continue, further supporting short-term freight rates. Since May, many shipping lines have reduced the number of ships, leading to a sharp decrease in capacity while demand remains constant, causing freight rates to surge. Additionally, some companies are imposing PSS, further driving up freight rates.
Moreover, factors such as anti-subsidy measures and the US Section 301 investigation have exacerbated short-term export surges, supporting the basis for spot market price increases.
As of now, among the top five global shipping companies, only MSC has not yet announced its rates on its official website. How generous will MSC be this time? Feel free to share your bold predictions!