Global shipping rates show signs of decreasing

Last week, shipping costs for shipping containers from Asia to the US began to decrease significantly. According to many sources, important indicators tracking freight prices all recorded a sharp decrease in trade routes connecting Asia with the US.

In the past 2 weeks, space on container ships has become more available, making it easier for shippers to book. This signals that demand has begun to weaken or that the large-scale addition of container shipping capacity from the beginning of the year to the end of the year is also starting to have an impact.

“Booking seats on container ships has become easier in the past 2 weeks,” said a forwarder.

 

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Container ships unload cargo at a wharf at the Long Beach port complex – Port of Los Angeles in California, USA. Photo: Reuters

 

Major shipping companies in the world such as MSC (Switzerland) have taken the lead in adding an additional capacity of 400,000 TEU to the fleet since January.

Currently, the total shipping capacity of the MSC fleet is more than 6 million TEU. In the near future, the container shipping capacity of these companies will continue to increase. MSC and CMA CGM (France) will receive deliveries of new ships with a total capacity of about 1.2 million TEU this year and next. It is expected that CMA CGM will likely surpass Denmark’s Maersk to become the second largest shipping company within the next 2-3 years.

After 3 consecutive months of increases, spot container shipping rates began to decrease, also affecting the charter market.

Ocean freight rates have surged this year due to shipping disruptions in the Red Sea and a recent spike in demand, as Western retailers shipped goods early for the year-end shopping season. As demand weakens, freight rates will face downward pressure, even if Red Sea tensions persist because new ships are arriving soon.

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