Endless Surge in Freight Rates... SCFI Index at 1938.32

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] Since the outbreak of the novel coronavirus disease (COVID-19), container ship freight indices have continued to surge.

According to the shipping industry on the 22nd, as of the 20th, the Shanghai Containerized Freight Index (SCFI) recorded 1,938.22, up 80.99 points from the previous week. This once again broke the highest record since the related statistics began.

By route, the US West Coast route recorded $3,913 per FEU (a unit referring to one 12m container), up $25, while the US East Coast route rose $6 to $4,682. For the Europe route, it rose $137 to $1,644 per TEU (a unit referring to one 6m container), and the Mediterranean route increased $123 to $1,797, showing a strong upward trend.

Earlier this year, the rise was interpreted as an effect of shipping companies adjusting capacity in anticipation of a recession due to COVID-19, but recently, despite the pandemic, the rapid recovery of consumption in major consumer countries such as the US and Europe has been cited as the main cause of the freight rate surge.

While the shipping industry is smiling broadly due to these high freight rates, domestic export companies are facing increasing difficulties. For this reason, the national shipping company HMM has recently been supporting domestic companies by deploying an additional vessel every month.

Meanwhile, there is interest in whether this rapid freight rate increase will continue for the time being. The trend in the US, the largest consumer country, is unusual. The National Retail Federation (NRF) has predicted that US imports will decrease by 8.2% in December this year and by 3.7% in January next year compared to the previous year.