Beneficial Cargo Owners (BCO) renegotiating their contracts with container lines as freight rates dropped

Posted on September 19, 2022   |  

• The Shanghai Containerised Freight Index (SCFI) spot box freight rate index fell week-on-week by 10% to 2,848 points but is over three times the 2019 average. 
• The rates on Shanghai-US west coast route fell by over 20% to $3,959 per (FEU) Forty-Foot-Equivalent-Unit. 
• For November, China to US west coast rates reached $3,000 per feu including the bunker adjustment factor, and for Q1 2023 rates will be $2,500.
• In August, Chinese exports grew by 7.1% compared to a year earlier, which is delaying from an 18% gain in July.
• In the Pacific, in August, US manufacturing PMI fell from 63.7 in March last year to 52.8.
• The continuous injection of more vessel capacity is due to low bottleneck effects, which is cutting sales possibilities in North America and Europe.
• The inflation and the risk of recession in North America and Europe are forcing importers to worry about an extra inventory and a wide-scale shutdown of production in China.
• The transpacific carrier’s latest rates breached the $3,500 mark, which will further drop the published rate indices in the coming weeks, which will pressurize all trade lanes out of Asia.