North American Market:

The market is running weak, coupled with sufficient shipping capacity, expectation of freight increase seems not likely but the rate is possible to go further softening, especially on the US Northwest and US East coast. Some major shipping companies have extended their rates level until the end of September, and other companies may follow up.

Shipping companies of US trade lane players have already canceled peak season surcharges before the October Golden Week. There are signs of improvement in congestion at the Panama Canal, but vessel drafts continue to be limited due to water levels not fully restored to normal. Apart from vessels without reservation of transit pass, container ship passage has not been affected, as well as Panama's rail and trucking transportation.

Latin American Market:

Overall demand remains weak, which may last till the end of September.

The SCFI index continues to decline slightly, forcing shipping companies to postpone GRI plans until the second half of September or even October. Short-term rates for the South America East route are expected to remain stable or slightly decrease, while rates for the South America West and Mexico routes are also stable or declining. The water level situation in the Amazon continues to be worse, and shipping companies are considering to implement a Low Water Surcharge (LWS).

Europe & Mediterranean Market:

Europe: Due to the new delivery of large size vessels during August and the subsequent new launching capacity of nearly 200,000 TEUs, coupled with a lack of scrapped vessel capacity and effective capacity management measures, Asia-Europe route freight rates have been severely impacted. Weak booking trends have continued into late September, and shipping companies have enough supply of empty containers.

Mediterranean: The SCFI index has declined for five consecutive weeks. Short-term rates are expected to continue to decline during September. There is a downward trend in market demand, and it appears that this weak situation will persist at least until the end of September. Overall, there is ample space availability.

Article source: KuehneNagel