What's The Right Price For The Container Freight?
Sep 10, 2021
According to data from several shipping agencies that publish freight indices, this spread is reflected in the estimated freight rate. According to the Baltic Freight Index (FBX), as of September 3, the spot freight rate of the Asia-US East (USEC) route was US$21,686/FEU, and on August 27, the Shanghai Container Freight Index (SCFI) spot freight price was $11,138/FEU; the former is almost twice that of the latter. In the Asia-Western United States (USWC) route, the gap is even more exaggerated. The Baltic Freight Index reported a price of US$20,188/FEU, while the Shanghai Container Freight Index was US$5,949/FEU.
Xeneta, Platts, and some other freight indices provided by Drewry are somewhere in between these two extremes. On September 2nd, the freight rate for the Delori Asia-West America route was US$11,509/FEU, and the rate for Asia-East America was US$15,035/FEU. Erik Devetak, chief product and data officer at Norwegian shipping agency Xeneta, said that no index is right or wrong. In the trans-Pacific route market, all prices are valid. However, he said that the level of freight depends on the type of shipper, where to ship from, where to ship, and the timeliness of transportation.
He added that in the past six months, the trans-Pacific region has transformed from a single market to today's "fragmented and fragmented market." Liner companies charge premiums and insurance premiums, and their weights are increasing, which has exacerbated this change. This premium, the so-called "undifferentiated freight" for guaranteed space and equipment, is added to the basic price. In the trans-Pacific market, this will increase the transportation cost of a unit container by 40%, or US$2,500. However, Devetak said that some shippers have "defaulted" and used "premium" instead of normal freight rates. "Customers who are more attractive to liner companies will measure two prices and can ship at two different prices."
He said that the transformation of the trans-Pacific route market has produced "winners and losers." The new situation favors shippers with larger cargo volumes because they can deal directly with liner companies. Shippers who are "not very attractive" to liner companies are faced with the situation of being forced to pay 20% more freight on the base price, which is about US$1,200/FEU.
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