- Peak season cargo is front-loaded in June and July, muting tariff effect.
- Transpacific and Asia-Europe rates continue to slide for the 10th consecutive week.
- SCFI drops 35% over the period, with rebound prospects fading.
In its latest Market Pulse, Linerlytica highlights that the recent 90-day extension of US tariffs on China has pushed the expiration date to November 10, 2025. However, the effect on container volumes is expected to be minimal. Most of the peak season cargo was already loaded up in June and July, which lessens the impact of this extension, reports Safety4Sea.
Continued Rate Weakness on Key Routes
Freight rates on the Transpacific and Asia-Europe routes have continued to decline over the past week. The Shanghai Containerised Freight Index (SCFI) has dropped for the tenth week in a row, losing 35% of its value during this time. Hopes for a rebound in September are dwindling, as carriers seem hesitant to actively manage capacity to address the falling utilisation rates.
Carrier Strategies
Gemini carriers have kept a perfect record of zero blank sailings on their main services, opting to focus on maintaining volumes rather than raising rates. This strategy has led to ongoing rate declines, even with the market fundamentals showing weakness.
Charter Market Resilience
On the flip side of the declining freight rates, the charter market is holding strong. Demand in specific corridors, especially in Asia, the Mediterranean, the Middle East, and Latin America, remains robust enough to keep charter rates elevated.
Record Containership Orderbook
The containership orderbook has hit a staggering 10.4 million TEU, following a wave of new vessel orders in the past year. This orderbook now represents 31.7% of the global fleet, marking the highest level since 2010.
Historical Context and Outlook
The last time the orderbook ratio was this high, between 2004 and 2009, it led to a decade-long oversupply that took ten years to resolve. With over 1 million TEU of additional ship orders still awaiting delivery by the end of the year, the threat of oversupply is a significant concern for the container shipping market.
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Source: Safety4Sea
