Freight Rate Weekly: Eight-Week Rally Ends, Persian Gulf Up 7.45%
Freight Rate Weekly: Eight-Week Rally Ends, Persian Gulf Up 7.45%
Executive Summary
SCFI printed 3,686.62 on Sep 24. Europe kept sliding. One lane went the other way.
| 1.28% |
| 0.78% |
| 4.61% |
| 1.92% |
| 7.45% |
| 1% |
| 5.4% |
| 21 points |
Overview
Here's the thing. The Sep 24 issue of the SCFI closed at 3,686.62, down 1.21 points from the Sep 18 print, and that ends a run of eight straight weekly gains. Read it lane by lane and the picture changes completely. US West Coast fell 1.28% to USD 7,463 per FEU. US East Coast slipped 0.78% to USD 10,497 per FEU, leaving the East/West spread at USD 3,034. Europe dropped 4.61% to USD 2,313 per TEU and the Mediterranean lost 1.92% to USD 3,065 per TEU. The Persian Gulf was the only lane in the table that turned green, up 7.45% to USD 4,584 per TEU. Drewry's World Container Index told the same story on the same day: USD 4,468 per FEU, down 1%.
Rates fell on the lanes you quote daily.
Not on that one.
Key Details
Put simply, this is risk premium, not volume. Shanghai to Persian Gulf base ports printed USD 6,586 per TEU on Sep 24, up 5.4% on the week, as tension across the Middle East spread toward the Red Sea and shippers pulled cargo forward. Drewry said it plainly: Suez transits are rising, but Red Sea security risk remains the key uncertainty, Panama Canal capacity is still constrained, and German labour disruption plus low water on the Rhine keep dragging on European supply chains. Frankly, if you price Middle East cargo off the Europe numbers, you are pricing it wrong.
Two different markets.
Quote them that way.
Looking Ahead
Rates fell. Carriers are filing increases anyway. C.H. Robinson's Sep 15 advisory sets a general rate increase from Asia, South Asia, the Middle East and Africa to the United States and Canada, effective Oct 15: USD 1,700 per 20ft box, USD 2,000 per 40ft and 40ft high cube, USD 2,535 per 45ft, and USD 40 per CBM or per ton on LCL. CMA CGM moves earlier, on Oct 1, with EUR 100 per container from Europe and the Mediterranean to the South America East Coast, plus USD 1,000 per 20ft on its BRAZEX service. Watch out for the gap between a soft index and loud filings.
You have 19 days before Oct 15.
Implications
Bottom line, three moves. First, stop apologising for soft Europe numbers: USD 2,313 per TEU is the exchange's own print and 4.61% is the weekly fall, so hand both to the customer. Second, lock Middle East and Red Sea space now, because USD 6,586 per TEU is still climbing and the Europe slide simply does not apply there. Third, do not assume the Oct 15 increase lands in full. US East Coast has now fallen two weeks running to USD 10,497 per FEU, so treat USD 2,000 per FEU as an opening bid rather than a settled number.
Do not bet on it.
Do the math with your customer.
Market Outlook
Our read is that less than half of it lands. And if European carriers start pulling capacity to strengthen their hand in contract talks, the Europe slide could stall in the second half of October — that is the moment to lock your Europe contract rate.JETWAY Supply Chain is your execution partner on the ground in China — based in Tianjin, licensed as an NVOCC (MOT) and a member of CIFA, FIATA and WCA. We handle special cargo and compliance (dangerous goods, chemicals, batteries) across ocean, air, rail and road, and we pre-check your documents before the box is stuffed so your filing clears the first time. Send us your next booking and we will run the checks above against your sailing date. Request a quote.