awful! World container index down 16% this year

 

From Business Times  2022.04.17

 

Affected by the high inflation in the United States, the tightening of people's wallets, and the recent shutdown of Shanghai to fight the epidemic, which has led to a sharp drop in shipments, the World Containers Index (WCI) has fallen by 16% so far this year. Experts believe that in view of the increase in the supply of new ships at the end of the year, if the purchasing power of European and American people still does not rise, even if Shanghai reopens, it will be difficult to reverse the decline in freight rates.

 

SCFI fell for 13 consecutive years, Ningbo NCFI rose

Lu Fengcheng broke the chain, Peng Shuanglang sighed helplessly

According to the World Container Index compiled by shipping consultancy Drewry, the index has fallen by 16% this year, with the two major routes from Shanghai to Los Angeles and Shanghai to New York, down 17% and 16% respectively.

 

The index also pointed out that the sharpest decline was in the period from March 10 to date, down about 13%, reflecting weak retail sales in the United States this spring and the epidemic in mainland China that began to heat up in mid-March, which have affected global container shipping. Market shocks.

 

Analysts pointed out that from the demand side, the end of the epidemic stimulus measures, the consumption trend has begun to shift from goods to services, and the rising inflation has led to increasingly heavy price pressures, which have somewhat suppressed the purchasing power of the people. As for the supply side, the closure of the city in Shanghai has led to chaos in logistics and reduced demand for containers.

 

According to George Griffiths, editor of S&P Global Platts' global container shipping rates team, some shipping companies are starting to use "blank flights" in order to support freight rates, that is, to keep ships in operation, but without loading or unloading items at ports. etc., to reduce the number of ships they supply.

 

Although the world container index is still higher than the level before the epidemic, at the end of the year, due to the increase in the supply of new ships, and if inflation does not ease, it is difficult to boost terminal consumption, and this wave of curve is expected to continue to decline. Even if the closure of Shanghai is over and logistics can return to normal, the increase in freight rates will be limited.

 

In addition, due to the impact of the war in Russia and Ukraine, the cost of transporting grains and other freight has also dropped from mid-March. Although the Baltic Dry Index has slightly outperformed the World Container Index this year, it has remained flat at best.

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At the same time, due to the slowdown of the container shipping market, shipping stocks are also affected. For example, the share price of Muller-Maersk has tumbled 20% since mid-March. If Shanghai's anti-epidemic measures cannot be loosened in the near future, and European and American consumers continue to reduce their spending, it is expected that the decline in shipping stocks will be even worse.awful! World container index down 16% this year

 

From Business Times  2022.04.17

 

Affected by the high inflation in the United States, the tightening of people's wallets, and the recent shutdown of Shanghai to fight the epidemic, which has led to a sharp drop in shipments, the World Containers Index (WCI) has fallen by 16% so far this year. Experts believe that in view of the increase in the supply of new ships at the end of the year, if the purchasing power of European and American people still does not rise, even if Shanghai reopens, it will be difficult to reverse the decline in freight rates.

 

SCFI fell for 13 consecutive years, Ningbo NCFI rose

Lu Fengcheng broke the chain, Peng Shuanglang sighed helplessly

According to the World Container Index compiled by shipping consultancy Drewry, the index has fallen by 16% this year, with the two major routes from Shanghai to Los Angeles and Shanghai to New York, down 17% and 16% respectively.

 

The index also pointed out that the sharpest decline was in the period from March 10 to date, down about 13%, reflecting weak retail sales in the United States this spring and the epidemic in mainland China that began to heat up in mid-March, which have affected global container shipping. Market shocks.

 

Analysts pointed out that from the demand side, the end of the epidemic stimulus measures, the consumption trend has begun to shift from goods to services, and the rising inflation has led to increasingly heavy price pressures, which have somewhat suppressed the purchasing power of the people. As for the supply side, the closure of the city in Shanghai has led to chaos in logistics and reduced demand for containers.

 

According to George Griffiths, editor of S&P Global Platts' global container shipping rates team, some shipping companies are starting to use "blank flights" in order to support freight rates, that is, to keep ships in operation, but without loading or unloading items at ports. etc., to reduce the number of ships they supply.

 

Although the world container index is still higher than the level before the epidemic, at the end of the year, due to the increase in the supply of new ships, and if inflation does not ease, it is difficult to boost terminal consumption, and this wave of curve is expected to continue to decline. Even if the closure of Shanghai is over and logistics can return to normal, the increase in freight rates will be limited.

 

In addition, due to the impact of the war in Russia and Ukraine, the cost of transporting grains and other freight has also dropped from mid-March. Although the Baltic Dry Index has slightly outperformed the World Container Index this year, it has remained flat at best.

 

At the same time, due to the slowdown of the container shipping market, shipping stocks are also affected. For example, the share price of Muller-Maersk has tumbled 20% since mid-March. If Shanghai's anti-epidemic measures cannot be loosened in the near future, and European and American consumers continue to reduce their spending, it is expected that the decline in shipping stocks will be even worse.