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China-US Container Fright Rates Reach New Heights, Jump 40% in a Week

theguru Views  

[TheGuru=Reporter Gil Soyeon] Container freight rates from China to the United States have significantly increased this month. The increase in Chinese consumption has led to a rise in China-US container freight rates, causing growing concerns among Chinese export companies.

According to industry sources, on the 19th, the container freight rate from China to the United States increased by nearly 40% within a week. The cost of cargo transportation has also soared to tens of thousands of dollars.

The freight rate for a 40-foot container (FEU) from Shanghai to the U.S. West Coast is $4,393, while the rate for the East Coast is $5,562 per 40-foot FEU. Compared to the end of April, the rates for the Western and Eastern routes have increased by 22% and 19.3%, respectively. The freight rates from China to the U.S. have reached the levels seen during the 2021 Suez Canal blockage.

The Shanghai Containerized Freight Index (SCFI) recorded 2,305.79 points as of the 10th. This is an 18.8% surge compared to the 1,940.63 points announced on the 26th of last month, before the Labor Day holiday. This marks the highest level since September 2022, during the COVID-19 pandemic. SCFI is a global freight index compiled by the Shanghai Shipping Exchange (SSE) reflecting spot fares on 15 routes in the Shanghai export container transportation market.

The shipping industry indicates that the surge in Chinese consumption has fueled the rise in container freight rates.

According to the Chinese Ministry of Commerce, during this year’s Labor Day Golden Week holiday (May 1–5), sales of automobiles, home appliances, and furniture in China increased by 4.8%, 7.9%, and 4.6%, respectively, compared to the previous year. The volume of goods handled at the Shanghai port in April rose by 4.2% compared to last year, recording 4.18 million TEUs.

The Korea Maritime Promotion Corporation stated, “The surge in consumption before and after the Chinese Labor Day Golden Week holiday and the increase in U.S. import volumes are the main factors driving up container freight rates.”

The rise in container freight rates is expected to continue for now. With geopolitical risks adding to the uncertainty in the shipping market, an increase in export demand starting this month could sustain the upward trend in freight rates. Traditionally, container freight rates rise as the peak shipping season begins in May with increased global cargo volume.

If high freight rates persist, the increased cost of ocean logistics borne by exporters could threaten the profitability of Chinese export companies.

theguru
content@viewusglobal.com

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