Aug 2, 2023

European routes finally staged a major rebound in freight rates, surging by 31.4% in a single week. Transatlantic fares also rose by 10.1% (reaching a total increase of 38% for the entire month of July). These price hikes have contributed to the latest Shanghai Containerized Freight Index (SCFI) rising by 6.5% to 1029.23 points, reclaiming the level above 1000 points. This current market trend can be seen as an early reflection of the shipping companies’ efforts to raise prices for European and American routes in August.

Insiders reveal that with limited cargo volume growth in Europe and the United States and continuous investment in additional shipping capacity, shipping companies have already approached the limit of void sailings and reduced schedules. Whether they can sustain the rising trend in freight rates during the first week of August will be a crucial point of observation.


On August 1st, shipping companies are set to synchronize a price increase on European and American routes. Among them, on the European route, the three major shipping companies Maersk, CMA CGM, and Hapag-Lloyd are leading the way in preparing for a significant fare hike. According to information from freight forwarders, they received the latest quotes on the 27th, indicating that the transatlantic route is expected to increase by $250-400 per TEU (Twenty-foot Equivalent Unit), targeting $2000-3000 per TEU for the US West Coast and US East Coast respectively. On the European route, they are planning to raise prices by $400-500 per TEU, aiming for an increase to around $1600 per TEU.

Industry experts believe that the actual extent of the price increase and how long it can be sustained will be closely observed during the first week of August. With a large number of new vessels being delivered, shipping companies will face significant challenges. However, the movement of the industry leader, Mediterranean Shipping Company, which experienced a remarkable capacity increase of 12.2% in the first half of this year, is also being closely monitored.
As of the latest update, here are the Shanghai Containerized Freight Index (SCFI) figures:

Transpacific Route (US West Coast): Shanghai to US West Coast: $1943 per FEU (Forty-foot Equivalent Unit), an increase of $179 or 10.15%.

Transpacific Route (US East Coast): Shanghai to US East Coast: $2853 per FEU, an increase of $177 or 6.61%.

European Route: Shanghai to Europe: $975 per TEU (Twenty-foot Equivalent Unit), an increase of $233 or 31.40%.

Shanghai to the Mediterranean: $1503 per TEU, an increase of $96 or 6.61%. Persian Gulf Route: The freight rate is $839 per TEU, experiencing a significant drop of 10.6% compared to the previous period.

According to the Shanghai Shipping Exchange, the transportation demand has remained at a relatively high level, with a good supply-demand balance, leading to a continuous increase in market rates. For the European route, despite the eurozone’s preliminary Markit Composite PMI dropping to 48.9 in July, indicating economic challenges, the transportation demand has shown positive performance, and shipping companies have implemented price increase plans, driving significant rate increases in the market.

As of the latest update, the freight rates for the South America route (Santos) are $2513 per TEU, experiencing a weekly decrease of $67 or 2.60%. For the Southeast Asia route (Singapore), the freight rate is $143 per TEU, with a weekly decline of $6 or 4.30%.

It is noteworthy that compared to the SCFI prices on June 30th, the rates for the Transpacific Route (US West Coast) increased by 38%, the Transpacific Route (US East Coast) increased by 20.48%, the European route increased by 27.79%, and the Mediterranean route increased by 2.52%. The significant rate increases of over 20-30% on the main routes of the US East Coast, US West Coast, and Europe far surpassed the SCFI index’s overall increase of 7.93%.

The industry believes that this surge is entirely driven by the determination of shipping companies. The shipping industry is experiencing a peak in new vessel deliveries, with continuous accumulation of new capacity since March, and a record high of nearly 300,000 TEUs of new capacity added globally in June alone. In July, although there has been a gradual increase in cargo volume in the United States and some improvement in Europe, excess capacity remains challenging to digest, resulting in a supply-demand imbalance. Shipping companies have been stabilizing freight rates through void sailings and reduced schedules. Rumors suggest that the current void sailing rate is approaching a critical point, especially for European routes with many new 20,000 TEU vessels launched.

Freight forwarders mentioned that many ships are still not fully loaded at the end of July and early August, and whether the shipping companies’ August 1st price hike can withstand any downturn will depend on whether there is a consensus among the companies to sacrifice loading rates and jointly maintain the freight rates.


Since the beginning of this year, there have been multiple freight rate increases on the Transpacific route (US to Asia). In July, a successful and stable increase was achieved through various factors, including extensive void sailings, the recovery of cargo volume, the Canadian port strike, and the end-of-month effect.

The shipping industry points out that the significant decline in freight rates on the Transpacific route in the past, which approached or even fell below the cost line, strengthened the determination of shipping companies to raise prices. Additionally, during the period of intense rate competition and low freight rates on the Transpacific route, many small and medium-sized shipping companies were forced to exit the market, stabilizing the freight rates on the route. As cargo volume gradually increased on the Transpacific route in June and July, the price increase was successfully implemented.

Following this success, European shipping companies replicated the experience to the European route. Although there has been some increase in cargo volume on the European route recently, it remains limited, and the sustainability of the rate increase will depend on market supply and demand dynamics.
The latest WCI (World Container Index) from Drewry shows that the GRI (General Rate Increase), the Canadian port strike, and capacity reductions have all had a certain impact on Transpacific route (US to Asia) freight rates. The latest WCI trends are as follows: The Shanghai to Los Angeles (Transpacific US West Coast route) freight rate broke through the $2000 mark and settled at $2072. This rate was last seen six months ago.



The Shanghai to New York (Transpacific US East Coast route) freight rate also surpassed the $3000 mark, increasing by 5% to reach $3049. This set a new six-month high.

The Transpacific US East and US West Coast routes contributed to a 2.5% increase in the Drewry World Container Index (WCI), reaching $1576. Over the past three weeks, the WCI has risen by $102, representing a roughly 7% increase.

These data indicate that recent factors, such as the GRI, the Canadian port strike, and capacity reductions, have influenced the Transpacific route freight rates, leading to price increases and relative stability.


According to Alphaliner’s statistics, the shipping industry is experiencing a wave of new vessel deliveries, with nearly 30 TEU of container ship capacity delivered globally in June, marking a record high for a single month. A total of 29 ships were delivered, averaging almost one ship per day. The trend of increasing new vessel capacity has been ongoing since March this year and is expected to remain at high levels throughout this year and the next.

Data from Clarkson also indicates that in the first half of this year, a total of 147 container ships with a capacity of 975,000 TEU were delivered, showing a year-on-year increase of 129%. Clarkson predicts that the global container ship delivery volume will reach 2 million TEU this year, and the industry estimates that the peak period of deliveries may continue until 2025.

Among the top ten container shipping companies globally, the highest capacity growth in the first half of this year was achieved by Yang Ming Marine Transport, ranked tenth, with an increase of 13.3%. The second-highest capacity growth was achieved by Mediterranean Shipping Company (MSC), ranked first, with a 12.2% increase. The third-highest capacity growth was seen by Nippon Yusen Kabushiki Kaisha (NYK Line), ranked seventh, with a 7.5% increase. Evergreen Marine Corporation, although constructing many new ships, saw a growth of only 0.7%. Yang Ming Marine Transport’s capacity decreased by 0.2%, and Maersk experienced a decrease of 2.1%. The industry estimates that several ship charter contracts may have been terminated.


Post time: Aug-02-2023

Leave Your Message