Ocean freight rates from China set to weaken amid waning demand, overcapacity
The outlook is bleak in the next two months as Chinese exports cool and the industry adds record new capacity in 2024
The outlook for the shipping industry is clouded by uncertainties created by heightened geopolitical tensions and concerns about recession in some parts of the global economy, Cai Huixing, president of Shanghai Shipowners’ Association, said in a media briefing on Thursday.
“The fourth-quarter is normally a low season for ocean freight,” he said. “We expect shipping rates to slump. As shipowners take actions to tackle the overcapacity problem, the rates are likely to rebound in 2025.”
The cost of shipping a 20-foot equivalent unit (TEU) container from Shanghai to Europe has weakened from more than US$5,000 in July. Exporters had front-loaded shipments for the holiday season to pre-empt US tariff hikes and avoid disruptions in the Red Sea following attacks on ships by Yemen’s Houthi rebels.
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Cai’s remarks echoed forecasts earlier this week by global freight booking platform Freightos that ocean carriers would have to brave rough seas through end-2024 given depressed freight rates. Still, the threat of wider war in the Middle East could push container freight rates higher.