Latest news with #ShanghaiContainerizedFreightIndex
Yahoo
21-05-2025
- Business
- Yahoo
Trans-Pacific Freight Rates Soar as China Cargo Bookings Rebound
The 90-day reduction in tariffs on Chinese imports have sent bookings out of the country soaring almost immediately—and ocean spot freight rates are following suit. Numerous indices tracking rates on the trans-Pacific trade lane are seeing abrupt spikes in the cost to move cargo out of China toward to the U.S. More from Sourcing Journal US Footwear Manufacturers Tell Trump Tariffs Should Fund Onshoring Resurgence Trump Says US Will Set Tariff Rates For Trade Partners Canada Cools US Trade Tensions By Drawing Down Retaliatory Duties The Shanghai Containerized Freight Index (SCFI) released Friday said deliveries from Shanghai to U.S. West Coast ports soared 32 percent from the week prior to an index rate of $3,091 per 40-foot container. The Shanghai-to-U.S. East Coast route saw a healthy 22 percent week-over-week jump to $4,069. Drewry's World Container Index (WCI) saw weekly Shanghai-to-New York sailings take the highest growth rate at 19 percent to $4,350 per 40-foot container (FEU), while trans-Pacific routes reaching Los Angeles shot up 16 percent to $3,136 on average. For Drewry, both routes buoyed the total WCI composite across eight major East-West trade lanes, which increased 8 percent from the week prior, to $2,233 per container. Xeneta's newest data released Friday had Far East-to-U.S. West Coast average rates reaching $2,722 per FEU, with average East Coast-bound rates at $3,883. 'There is no time to waste for these shippers and the rush of cargo will put upward pressure on spot rates on trans-Pacific trades,' said Peter Sand, chief analyst at Xeneta, in a weekly update. 'Spot rates will peak and then flatten as carriers redeploy capacity to match demand, then rates will begin to slide again just as we saw in Q1. This is expected to happen over the next two to four weeks.' With rates naturally increasing due to the quick turnaround in ocean freight demand, container shipping liners no longer have to resort to artificially propping yields up by cutting capacity via methods like blank sailings or vessel swapping. According to Drewry's container capacity insight online tool, blank sailings from Asia to the West Coast of North America will decrease 28 percent month-on-month from 33 in May to 24 in June. The number of blank sailings from Asia to the East Coast of North America will decrease from 23 in May to 17 in June, a 23 percent drop. This will result in double-digit increases (or returns) of ship capacity to these trades, after the recent cuts. 'It is a feature of the current volatile macro-environment that ocean carriers are 'cancelling cancellations' of sailings,' Drewry said in a post on LinkedIn. 'We notice that the container shipping market is reacting to trade policy announcements with swings in trade volumes, capacity volumes and spot prices, similarly to the stock market.' CMA CGM, which saw freight bookings for China exports to the U.S. get cut by 50 percent after President Donald Trump began his escalation of tariffs on April 3, is another ocean carrier seeing the quick rebound in bookings. 'Trade will restart on this route very, very vigorously in the coming weeks and months,' said CMA CGM chief financial officer Ramon Fernandez during a first-quarter earnings call, calling the duty rollback an 'indisputably positive signal for maritime transport.' 'Everyone is expecting trade in June to be much more active than was feared just a few days ago,' said Fernandez. The carrier, which plans to invest $20 billion into the U.S. throughout Trump's presidency, posted a 12.1 percent increase in revenue to $13.3 billion in the first quarter on net income of $1.1 billion. Volumes carried ticked up 4.2 percent to 5.85 million 20-foot equivalent units (TEUs). Additionally, the French shipping conglomerate gave more color on the anticipated U.S. port docking fees on Chinese ships, with Fernandez indicating 'we will organize ourselves in order not to have to pay these fees.' He added that less than half of the company's 670 vessels were built in China. Fernandez said Ocean Alliance partners including China's Cosco Shipping and would adapt to the fees, although he did not say what the wider impact would be to the vessel-sharing agreement. CMA CGM has added peak season surcharges on trans-Atlantic trips to the U.S. as the tariff situation remains at an impasse. From June 1, all cargo headed for the U.S. from northern Europe will carry an extra fee of $400 per TEU or $800 per FEU. And from June 15, cargo from Mediterranean ports to the East and Gulf Coast will get a $500 surcharge. Maersk is slapping peak charges on China- and east Asia-originated cargo to U.S. and Canada as well, hitting them with an extra $1,000 per TEU and $2,000 per FEU. 'Given the tighter capacity on the trans-Pacific, ocean carriers are in the driver's seat to push freight rates meaningfully higher,' said Jefferies analysts in a research note Tuesday.
Zawya
28-04-2025
- Business
- Zawya
UNCTAD expects global growth to slow to 2.3% in 2025 as trade, economic policy uncertainty erode business, investor confidence
GENEVA: Global growth is forecast to slow to 2.3% in 2025, slipping below the 2.5% threshold often associated with a global recession, UN Trade and Development (UNCTAD) said in its latest report. This marks a sharp deceleration compared to already sluggish pre-pandemic growth rates. UNCTAD warns that rising uncertainty is weighing heavily on the global economy. Trade tensions are escalating, with recent tariff hikes undermining predictability. Rising fragmentation, if left unchecked, could deepen the downturn. Trade policy uncertainty, now at historic highs, is eroding business confidence and reshaping global trade patterns. Manufacturers and investors are delaying decisions, reassessing supply chain strategies and stepping up risk management efforts. After a temporary surge at the end of 2024, merchandise trade momentum is fading, with the Shanghai Containerized Freight Index dropping by 40% between January and March 2025, falling back to pre-pandemic levels. Record-high economic policy uncertainty is also fuelling financial turbulence. In early 2025, the Economic Policy Uncertainty Index reached its highest level this century, surpassing peaks during the 2008 financial crisis and the COVID-19 pandemic. In early April, markets saw sharp corrections and heavy losses after weeks of volatility. The so-called financial 'fear index' – a gauge of US stock market volatility – reached its third-highest level on record, behind only the peaks seen during the pandemic and global financial crisis. Heightened uncertainty is pushing up bond yields, reflected in a rising "term premium" – extra compensation investors demand for holding long-term debt. This is raising financing costs for governments, households and firms, putting further upward pressure on global interest rates and complicating prospects for developing economies. The slowdown will affect all economies, but UNCTAD highlights particular risks for developing countries. Many low-income economies face a 'perfect storm' of tighter financial conditions, high external debt and weakening domestic growth. More than half of low-income countries – 35 out of 68 – are now in debt distress or at high risk, according to the International Monetary Fund. Persistently high bond yields in advanced economies, alongside tighter US monetary policy, are expected to crowd out financial flows to developing countries. Investor caution is redirecting capital toward assets and markets perceived as 'safer', further straining financing for the Global South. Despite the headwinds, opportunities exist. Trade among developing countries – also known as South-South trade – is expanding faster than other trade flows and now accounts for about one third of global trade. In East and South-East Asia, intraregional trade has been a major force behind economic growth, with the region contributing over 40% of global growth in 2024. UNCTAD's report calls for stronger regional integration, renewed multilateral cooperation and a rebalancing of fiscal priorities toward sustainable infrastructure, social protection and climate action. Coordinated action, it says, will be essential to restore confidence and keep development on track
Gulf Today
27-04-2025
- Business
- Gulf Today
Global growth to slow to 2.3% in 2025: UNCTAD
Global growth is forecast to slow to 2.3% in 2025, slipping below the 2.5% threshold often associated with a global recession, UN Trade and Development (UNCTAD) said in its latest report. This marks a sharp deceleration compared to already sluggish pre-pandemic growth rates. UNCTAD warns that rising uncertainty is weighing heavily on the global economy. Trade tensions are escalating, with recent tariff hikes undermining predictability. Rising fragmentation, if left unchecked, could deepen the downturn. Trade policy uncertainty, now at historic highs, is eroding business confidence and reshaping global trade patterns. Manufacturers and investors are delaying decisions, reassessing supply chain strategies and stepping up risk management efforts. After a temporary surge at the end of 2024, merchandise trade momentum is fading, with the Shanghai Containerized Freight Index dropping by 40% between January and March 2025, falling back to pre-pandemic levels. Record-high economic policy uncertainty is also fuelling financial turbulence. In early 2025, the Economic Policy Uncertainty Index reached its highest level this century, surpassing peaks during the 2008 financial crisis and the COVID-19 pandemic. In early April, markets saw sharp corrections and heavy losses after weeks of volatility. The so-called financial "fear index' - a gauge of US stock market volatility - reached its third-highest level on record, behind only the peaks seen during the pandemic and global financial crisis. Heightened uncertainty is pushing up bond yields, reflected in a rising "term premium" - extra compensation investors demand for holding long-term debt. This is raising financing costs for governments, households and firms, putting further upward pressure on global interest rates and complicating prospects for developing economies. The slowdown will affect all economies, but UNCTAD highlights particular risks for developing countries. Many low-income economies face a "perfect storm' of tighter financial conditions, high external debt and weakening domestic growth. More than half of low-income countries - 35 out of 68 - are now in debt distress or at high risk, according to the International Monetary Fund. Persistently high bond yields in advanced economies, alongside tighter US monetary policy, are expected to crowd out financial flows to developing countries. Investor caution is redirecting capital toward assets and markets perceived as "safer', further straining financing for the Global South. Despite the headwinds, opportunities exist. Trade among developing countries - also known as South-South trade - is expanding faster than other trade flows and now accounts for about one third of global trade. In East and South-East Asia, intraregional trade has been a major force behind economic growth, with the region contributing over 40% of global growth in 2024. UNCTAD's report calls for stronger regional integration, renewed multilateral cooperation and a rebalancing of fiscal priorities toward sustainable infrastructure, social protection and climate action. Coordinated action, it says, will be essential to restore confidence and keep development on track.
Japan Times
03-03-2025
- Business
- Japan Times
U.S. tariffs, easing of Middle East tensions threaten reversal of shipping boom
Global shippers from AP Moller-Maersk to Cosco Shipping Holdings, which logged windfall earnings last year, may see a reversal of fortunes in 2025 as a potential reopening of the Red Sea route and punitive U.S. tariffs loom. Plans by U.S. President Donald Trump to introduce new import levies are damaging trade, while the prospect of a lasting ceasefire in the Middle East could redirect traffic back through the Suez Canal, driving rates lower. Global liner rates fell 5.9% sequentially in the week ended Feb. 27, after earlier breaking below $3,000 per 12-meter container for the first time since early May, according to World Container Index data. The Shanghai Containerized Freight Index has lost 57% from its peak in July.
