Container shipping has been warned to brace for a hard landing in rates as multiple indices around the world continue to fall.

Despite the increase in empty runs, utilization is declining. According to a new Jefferies report, spot rates tracked by the Shanghai Containerized Freight Index (SCFI) are on a “rapid downward trend.”

Overall his SCFI spot rate index for interest from China across various trade lanes fell another 9.7% last week.

Analysis by Vespucci Maritime shows the index has fallen 33% over the past four weeks, making it his second-largest four-week drop since the SCFI index launched in 2009. Fares should be expected to be below normal in the long run

On average, implied fares for travel from Shanghai to worldwide destinations have fallen to $2,500 per TEU, half of their January peak. The current figure is well above the long-term pre-2020 average of $1,000 per TEU.

Sea-Intelligence warned in its latest weekly report that there is no underlying structural support underpinning high rates of trans-Pacific and Asian-European trade routes, and that support is at risk of disappearing in the Atlantic as well.

“The ongoing re-normalization of freight rates will also face a hard landing in the sense that freight rates are expected to remain below normal levels in the long term, followed by a significant recovery,” said Sea. is predicting.

The Clarkson’s Research-run index (see chart below) fell 26% last week, more than four times its 2019 average, but persistent negative sentiment weighed more heavily on charter rates. Clarksons noted in its latest weekly report that “weakness has been seen in recent weeks, particularly in feeder space, but the impact of lower freight rates has further reduced rental rates for larger size classes.” did.

“Overall sentiment around supply and demand has turned negative,” a Braemar analyst said of the containership charter scene, speaking of the “amazing” speed at which the market has changed.

The charter period and rate erosion also put the trading market into a period of rest as market participants bought shares.

Splash reported last week on Seaspan’s decision to cancel four of her 7,700 TEU newbuildings contracted by South Korea’s Bau K Shipbuilding, the first sign of a market downturn.

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Source: Splash247