Container spot freight rate decline bleeds into contracts

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The Shanghai Containerised Freight Index (SCFI) took another plunge this week, its fifth consecutive week of decline.

The SCFI recorded 1922.95 on 30 September, down from 2072.04 on 23 September and well down on its all time high of 5,051 in January. This week’s drop of 149.09 points compares to a 240.61-point drop in the prior week.

Analyst Xeneta noted a 1.1% drop in its XSI index for September 2022, the first drop in the index since January 2022 and only the third in the past 21 months. "However, Xeneta expects it won’t be the last, with market fundamentals suggesting that the “halcyon days” of ever-increasing rates for carriers may be drawing to a close," the firm said.

Drewry’s composite index for the container sector also fell this week by 10%, its 31st consecutive week of decline, and now sits 61% lower than the same week last year.

“The latest Drewry WCI composite index of $4,014 per 40-foot container is now 61% below the peak of $10,377 reached in September 2021, but it remains 8% higher than the 5-year average of $3,714.” Said Drewry.

Shanghai-Genoa led the fall, according to Drewry, with freight rates down 19% or $1,203 to $5,216 per feu. Spot rates on Shanghai - Los Angeles fell 13% or $496 to $3,283 per feu.

There was a small spots of improvement, with a 4% uptick on Rotterdam – New York, up $301 to $7,038 per feu.