Shipping Rates Fall for Ninth Consecutive Week as "Rush Exports" End, Dropping Below 1,500 Mark

The Shanghai Containerized Freight Index (SCFI), which reflects freight rates on global maritime shipping routes, stood at 1,489.68 on August 8, down 61.06 points from the previous week’s 1,550.74.

Shipping rates have declined for nine consecutive weeks since the first week of June (2,240.35), falling below the 1,500 mark. However, this is still about 15% higher than the annual low recorded in the third week of March (1,292.75).

Cargo is stacked on a container ship docked at Busan Port. Photo by Kang Jinhyung

By route, the US East Coast route dropped by $334 from the previous week to $2,792 per FEU (forty-foot equivalent unit). During the same period, the US West Coast route fell by $198 to $1,823.

The Mediterranean route decreased by $15 to $2,318 per TEU (twenty-foot equivalent unit). The Europe route also dropped by $90 to $1,961.

The Middle East route rose by $80 to $1,233, while the Australia-New Zealand route increased by $76 to $1,197. The South America route was recorded at $3,811, down $851.

It is interpreted that the sharp drop in shipping rates is due to the effective end of the so-called "rush exports" (exporting goods before tariffs take effect) caused by tariff uncertainty in the second half of this year. In the second quarter, demand had temporarily increased as a surge of rush shipments from China entered the market. According to shipping information provider Vesseln, container bookings on China-US routes reached 21,530 TEU on May 14, immediately after the US-China tariff agreement, representing a 277% increase from the previous week.

As the SCFI has fallen rapidly, there is a prevailing expectation that domestic shipping companies such as HMM will see poor earnings. According to financial information provider FnGuide, HMM’s operating profit for the second quarter is expected to be 395.9 billion won, which is nearly a 40% decrease compared to the same period last year.