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European routes rely on space controls to slow the decline in freight rates
Release date: [2024/4/8]  Read total of [94] times

The newly released Shanghai Export Container Freight Index (SCFI) released by the Shanghai HNA Exchange shows that the index recovered to 1,745.43 points this week, up 0.83%, ending a seven-week decline. The small increase in European route rates remained stable, while the US East and US West route rates continued to fall by about 2%, but the decline has narrowed. Routes to the Persian Gulf and South America saw increases of more than 10 percent.

According to industry insiders, the current off-season of freight, European routes mainly rely on the control of shipping space to slow down the decline in freight rates. In contrast, the US route is facing more intense competition, the market reported that Maersk and other shipping companies on the US-West route per 40 feet container freight rate has dropped to 2 words. At the same time, the freight rate per 40 feet container on the European route is maintained at the level of about 3,400 to 3,500 US dollars.

However, with the Red Sea crisis still unresolved, carriers need to service more ships and continue to control space in response to market changes. It is worth noting that the three major shipping alliances are about to be restructured in February next year, and this change has already begun to have an impact on the market. The main areas of cooperation of the Alliance shipping companies include trans-Pacific, trans-Atlantic and Far East to Europe routes.

With the breaking of the tacit understanding of the existing market, the American line has become the first affected area, and the competition within the alliance and the behavior of non-alliance shipping companies to cut prices and grab goods have made the market enter a volatile Warring States era. At present, the freight rates of the United States and European lines still maintain considerable profit margins. As long as they can maintain a level above $2,000, airlines can remain profitable.

Since the Red Sea crisis in December last year, the Shanghai Container Freight Index (SCFI) has maintained a whopping 72% increase. It is worth mentioning that the freight rates of European routes, Mediterranean routes and American West routes have doubled.

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