May Global Shipping Market Dynamics

May Global Shipping Market Dynamics

● As of last week, the SCFI composite index freight rates have been rising for four consecutive weeks. Although the increase is limited, this will lay the foundation for the official announcement of a significant increase in freight rates by shipping companies in May; Given strong short-term market demand, coupled with adjustments in the capacity layout of major shipping companies on major routes, it provides support for further boosting GRI;

● As of April 22, the total global container ship capacity reached 29.3 million TEUs, an increase of over 10% compared to the same period last year. Meanwhile, the monthly delivery capacity of new ships continues to exceed 300000 TEUs, while the scrapped capacity in the past month accounts for less than 5% of the newly added capacity; Despite the continuous delivery of new ships, due to the shortage of capacity caused by detours around the Cape of Good Hope, coupled with the deployment of new voyages in the summer, the existing available capacity is quickly depleted; The rental prices of medium and large vessels with a capacity of over 1200 TEUs continue to rise.

China to United States

At the end of April, the market's shipment volume surged, and shipping companies had cases of cargo explosion and dumping, especially in the west USA

Starting from May 1st, the market will welcome GRI. In addition, the new annual contract will take effect on May 1st, and the overall price is higher than last year. Long term contract customers are eager to ship as much as possible before the new contract takes effect, exacerbating the tight market space

Individual shipping companies in Shanghai Port are experiencing shortages and shortages of 40 foot conventional and high containers; The container situation at Ningbo Port is even more severe, with most mainstream shipping companies experiencing shortages or shortages of containers.

Starting from June 1st, the number of daily vessels passing through the Panama Canal will increase to 32 per trip; However, due to the increase in ship loading rates and the continuous empty flights of the OA alliance, the weight limit in North China has not eased but has become increasingly tense.

China to Latin America

The market demand continues to be strong, especially in the Latin American West and Mexico regions where there is a hot demand, leading to a shortage of cabin space for shipping companies. It is expected that the backlog situation will continue until June.

The SCFI index has been rising for several consecutive weeks, and FAK freight rates have also been rising all the way. Shipping companies have announced another increase in GRI in the first week of May.

The supply of 40 foot conventional and high containers by some European shipping companies continues to be tight, and the container situation at Ningbo Port is particularly severe.

There are no signs of improvement in congestion at ports in Brazil and Mexico, which continues to exacerbate market imbalances.

China to Europe

The booking volume continues to steadily increase, and by the end of April, the booking volume far exceeded the normal level, resulting in a very tight space;

Various shipping companies have experienced varying degrees of container condition issues, which are expected to continue until early May.

Shipping companies have recently announced a strong push for price increases in May, and it is expected that market freight rates will increase significantly in the next two weeks.

There are still delays in the return of Eastern bound ships. In order to maintain the scheduled rate and May freight rates, some shipping companies have chosen North China ports or deployed small vessels.

China to Mediterranean

By the end of April, all cabins were fully booked, and in early May, there was also a severe shortage. The main shipping companies dumped a large amount of cargo, so it is recommended to book cabins three weeks in advance.

In the past week, the SCFI index has risen, and some shipping companies have announced an increase in GRI in early March. It is expected that freight rates will rise significantly, and major shipping companies are experiencing varying degrees of container condition problems at major starting ports.