Shipping Market Shifts: Navigating Holiday Disruptions

The National Day holiday is approaching,and forpractitioners,this is not just a time to relax but also a moment to face new changes and challenges in the shipping market.

Current State of the Shipping Market

Traditionally,late September is considered the peak season for shipments,but this year seems different.Shipping lines have significantly increased blank sailings during this period.The latest data from Drewry shows that up to 16% of voyages on major routes are about to be canceled.This sudden change undoubtedly puts immense pressure on foreign trade shipment plans.

Compared to data from two weeks ago,the number of blank sailings has nearly tripled.This means that between Week 38 and Week 42,nearly 60% of blank sailings will occur on the Trans-Pacific Eastbound routes,with the rest on Asia-Northern Europe and Mediterranean routes.

Changes in Shipping Rates

With the increase in blank sailings,freight rates have experienced a noticeable decline.The World Container Index (WCI) fell by 7.1% month-on-month to $1,561.3/FEU.Meanwhile,market freight rates from Shanghai Port to several major ports have also dropped to varying degrees.

(1) European Routes: On September 15,the market freight rate (ocean freight and surcharges) from Shanghai Port to European base ports was $658/TEU,down 7.8% from the previous period.The Mediterranean route followed a similar trend,with spot booking prices continuing to decline.On September 15,the market freight rate (ocean freight and surcharges) from Shanghai Port to Mediterranean base ports was $1,248/TEU,down 4.6% from the previous period.

(2) North American Routes: On September 15,the market freight rates (ocean freight and surcharges) from Shanghai Port to base ports on the U.S.West Coast and U.S.East Coast were $1,888/FEU and $2,550/FEU,respectively,down 7.3% and 11.1% from the previous period.

(3) Persian Gulf Routes: On September 15,the market freight rate (ocean freight and surcharges) from Shanghai Port to Persian Gulf base ports was $864/TEU,down 8.9% from the previous period.

(4) Australia-New Zealand Routes: On September 15,the market freight rate (ocean freight and surcharges) from Shanghai Port to Australia-New Zealand base ports was $617/TEU,down 2.1% from the previous period.

(5) South American Routes: On September 15,the market freight rate (ocean freight and surcharges) from Shanghai Port to South American base ports was $1,816/TEU,down 5.6% from the previous period.

III.Countermeasures

In the face of such market changes,foreign trade practitioners need to prepare in advance.First,communicate with shipping companies and clients to understand the latest updates and changes in sailings,ensuring shipment plans can proceed smoothly.

Second,given the decline in freight rates,now may be a good time to reassess costs and profits.For orders with existing contracts,practitioners can negotiate with clients to explore possible price adjustments.

Finally,plan shipments early,book space in advance,and ensure goods arrive at their destinations on time.