Freight rates rise twice in a row! South American surge

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The Shanghai Export Freight Index (SCFI) rose for two consecutive weeks, with the latest index rising slightly by 1.01% to 2,256.46 points on the 6th. Although the main routes such as European line, the United States West, the United States East line appeared a slight decline, the decline is within $100, but the Persian Gulf (Dubai) and South America (Santos) and other secondary routes are showing a rising trend, up $112 and $365 respectively. https://www.yukonlog.com/

Freight forwarding industry sources revealed that due to the impact of U.S. President-elect Donald Trump's tariff policy, some shippers chose to rush their cargoes to Mexico in early January and then enter the U.S. through overland transportation to avoid potential tariff risks. In addition, European routes managed to raise prices around December 1 and basically maintained the increase this week.

Trump's new tariff policy is prompting an accelerated shift of the supply chain to Southeast Asia and Mexico, which has become the largest importer of the United States. Taiwan's three major container companies are operating routes from the Far East to the west coast of South America, Evergreen and Wanhai have 5-6 routes, and Yang Ming has 2 routes. According to Wan Hai, Mexico is the largest importer of Asia to South America West route, stable freight rates and cargo volume has increased in recent years.

As for the U.S. line, the industry pointed out that its continued decline is mainly affected by two major factors on the supply side of the capacity: First, the shipping company expects the tariff effect will be triggered by the wave of early shipments, so in the off-season did not take a large-scale empty shift program; Second, the current U.S. West and U.S. East freight rates are still at a high level, there is still room for profitability, and continue to attract ships to invest.

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In addition, with the U.S. East Terminal labor negotiations at an impasse on the issue of automation on January 15 next year, there is a risk of a second strike. Industry insiders believe that some shippers may gradually transfer their cargoes to the U.S. West line. At the same time, due to the Lunar New Year advance to the end of January, the U.S. line cargo volume is expected to rise week by week. Market rumors say that the shipping company plans to raise the European and American line tariffs on December 15, and the rate of increase is not small.

However, there are still many variables as to whether European and American shipping rates can successfully rise. The industry said that in order to stock up for the flights during the Spring Festival, shipping companies may grab goods at a lower price. In addition, taking into account the shipping alliance in February next year will be a big reshuffle, Maersk and Hapag-Lloyd composed of the new “Gemini Alliance” has begun to accept the booking of the cabin in early December, the shipping company to grab the cabin to grab the market war is about to start. Therefore, shipping companies in the call up tariffs may be mutual wait-and-see, at any time according to the market situation to adjust the rate of increase.

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