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

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.

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