The futures market is signalling a significant drop in sea freight rates, says Linerlytica.
According to the latest market update, the Shanghai Containerized Freight Index (SCFI) experienced a significant drop of 5.6% in the 34th calendar week. Linerlytica says the decline was mainly driven by sharp reductions on Transpacific and Middle East routes.
The Shanghai Containerized Freight Index for Spot (SCFIS) has been on a downward trajectory since its peak in July, particularly concerning the US West Coast.
“Although the drop is not as severe as the freight rate collapse seen at the end of 2022, current freight futures prices anticipate continuous declines over the coming 12 months, with no rebound expected at the end of this year”, states the Linerlytica market update.
The most remarkable part of the market updated has become the futures chapter, where Linerlytica emphasises that Northern European rates are trading at a discount of more than 70% compared to current spot rates. In other words, freight rates could drop by more than 70% by June next year.
Source: trans.info