Shipping Spot Rate Divergence Continues: How to Choose the Best Shipping Solution for Your Cargo?

As the shipping market stabilizes and evolves, we have observed a clear divergence in the spot rates across different trade lanes. To help you make more informed decisions in this complex transportation environment, we have compiled the latest rate trends and offered key insights, ensuring that your cargo can benefit from the most cost-effective shipping solutions.

Market Update: Divergence in Spot Rate Trends

As of November 14th, the Shanghai Containerized Freight Index (SCFI) stood at 1451.38 points, reflecting a 2.9% decline from the previous period. However, spot rates across different routes have shown distinct trends:

Europe Route: With steady demand, the spot rates have risen. The rate for shipments from Shanghai to European ports (including ocean freight and surcharges) reached USD 1,417/TEU, up 7.1% from the previous period.

Mediterranean Route: The supply-demand balance remains stable, and spot rates have held steady. The rate for shipments from Shanghai to Mediterranean ports remained unchanged at USD 2,029/TEU.

North America Route: With a lack of further growth in demand, the supply-demand balance is weak, leading to a downward trend in spot rates. The rate for Shanghai to the US West Coast dropped 17.6%, to USD 1,823/FEU, while the US East Coast rate fell 8.7%, to USD 2,600/FEU.

At the same time, the Drewry World Container Index (WCI) also fell 5% week-on-week, bringing the rate down to USD 1,859/FEU. Notably, spot rates on the Trans-Pacific routes saw significant declines, with Shanghai to Los Angeles dropping 12% to USD 2,328/FEU, and Shanghai to New York falling 15% to USD 3,254/FEU.

Impact Analysis: Spot Rate Divergence by Route

Europe Route: The increase in spot rates is largely driven by continued demand growth and a stable supply-demand balance. If you plan to ship goods to Europe, this is a favorable period for stable and competitive rates.

North America Route: The decline in rates on North American routes is a potential benefit for importers to the US, but it’s important to note that this downward trend may persist due to sluggish demand growth. Careful route and timing selection is crucial in this case.

Mediterranean Route: Spot rates on the Mediterranean route have remained stable. This route continues to offer a reliable option for clients who prefer stability in their shipping costs.

FAK Policy Changes: As the Asia-Europe contract season approaches, several shipping lines have announced the introduction of new Freight All Kinds (FAK) rates, which could lead to significant increases in spot rates. MSC, for example, has announced a 50% price hike for Far East to North Europe routes, starting December 1st. If you plan to ship to these regions, we recommend planning ahead to avoid price increases.

How to Respond to Spot Rate Fluctuations and Optimize Your Logistics Costs

Select the Right Routes: Based on your cargo destination and shipping timelines, we recommend flexible route selection. While European and Mediterranean routes remain relatively stable, North America routes are experiencing fluctuating rates. It is important to stay updated on market trends and select the best routes accordingly.

Plan Shipments Ahead: With the introduction of new FAK policies, some routes may see substantial rate increases. To mitigate the impact of these rate hikes, we suggest planning your shipments ahead of time and locking in rates with us to avoid last-minute price fluctuations.

Choose the Right Timing for Shipments: For clients with large shipping volumes, we can assist in securing long-term contracts, ensuring you benefit from stable rates over time. For more flexible clients, we provide real-time market updates and offer tailored solutions to help you make the best decisions.

Our Commitment to Service Excellence

Flexible Rate Adjustment: In response to market fluctuations, we offer flexible pricing options to ensure you receive the most cost-effective shipping services.

Transparent Pricing & Real-time Updates: We provide transparent pricing and timely updates, allowing you to stay informed of any market changes.

Comprehensive One-Stop Service: From booking to delivery, we provide comprehensive logistics tracking and customer service to ensure your cargo arrives on time and in good condition.

Conclusion: Stay Flexible to Optimize Your Shipping Costs

The shipping market is evolving rapidly, and spot rate divergence is becoming a norm. By staying flexible and responsive to these market changes, you can optimize your shipping strategy and reduce costs. Whether you plan to ship to Europe, North America, or other regions, we are here to offer professional advice and support to ensure your logistics operations are smooth and cost-efficient.

If you have any questions or shipping requirements, please don’t hesitate to contact our customer service team. We will work with you to create a customized shipping plan that fits your specific needs.

We look forward to partnering with you and supporting your global logistics efforts.