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Container rates continue down by almost 10% this week

For the 12th consecutive week, spot rates on container freight out of Shanghai are declining. Furthermore, supply chain congestion is waning.

Photo: Xu Congjun/AP/Ritzau Scanpix/AP

This week, the Shanghai Containerized Freight Index (SCFI), which measures spot prices on container freight from Shanghai to a number of global destinations, fell by 9.7% to 2,847.62.

The index has thereby declined for 12 consecutive weeks, falling by 36.8% compared to the same time last year.

Throughout last year, freight rates were heavily boosted by massive demand following the Covid crisis’ first lockdowns as well as supply issues with various causes, and this development continued into the first week of January, when the SCFI once again set a record at 5,109.6.

Since then, however, the index has fallen dramatically, with some increases here and there along the way. The most recent figure is the lowest since April last year.

Danish liner company Maersk has much of its container freight locked into long-term contracts with higher rates, and even though spot prices are currently dropping drastically, the company doesn’t expect its fixed-contract customers to seek renegotiations of their deals before schedule, CEO Søren Skou said in relation to the carrier’s financial report for the second quarter.

Last week, rates took a solid dive as well of 8%, considered by Mikkel Emil Jensen, senior analyst at Sydbank, to be the first sign of the normalization container carriers have long been boding.

”We see that supply chains are easing a bit off around the world, meaning carriers are better able to control capacity, and this makes rates decline,” said Jensen.

English edit: Kristoffer Grønbæk

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