As the upcoming Golden Week holiday approaches, the shipping market is experiencing a series of changes, with spot rates of major east-west shipping routes continuing to decline this week, the result of multiple factors.

◤ Continuous decline in freight rates

This week, there been a significant price drop on the Transpacific, Asia-Europe, and the traditionally more stable Transatlantic routes.

According to the World Container Index (W) published by Dynamar, the spot rate from Shanghai to Rotterdam further declined by 9% to end at $1,735 per 40- container, close to the pre-crisis low of $1,442 in mid-December 2023.

It is a similar situation on the to Mediterranean trade route, with the Shanghai to Genoa leg of the Dynamar World Container Index (WCI) seeing a 7% decline in rates from the previous week breaking the $2,000 mark to finally report $1,990 per 40-foot container.

Rotterdam to New York: After of stagnant freight rates, there was a 6% decline this week to reach $1,819 per 40-foot container.

Pacific: ShanghaiLos Angeles down 10% to $2,311 per 40-foot container; Shanghai-New York down 8% on the previous week to3,278 per 40-foot container.

The spot rates continue to find a floor, with the Dynamar World Container Index (WCI) down8% week-on-week to $1,761 per FEU, the lowest level since the start of 2024. Asia-Europe/editerranean rates fell by 8%, Transpacific by 9%, and Transatlantic by 6%.

◤ Capacity adjustments and rate changes

Drewry noted that container lines are reducing capacity to match the slowdown in demand ahead of China's Golden Week holiday, when factories will close for eight days, and freight rates expected to continue falling over the coming week. The details of the capacity adjustments are as follows:

Between Week 40 (September 29 - October 5 and Week 44 (October 27 - November 2), carriers have canceled 90 (13%) of the scheduled 716 sailings. of the canceled sailings are concentrated on the Transpacific Eastbound (50%), followed by Asia-Europe/Mediterranean (37%) and Transat Westbound (13%). With the capacity adjustments ahead of the factory shutdown during the Golden Week, the number of blank sailings announced for Weeks 40-4 has increased from 55 to 67 in one week, an increase of 22%. During this period, 87% of the weekly scheduled sailings are to be executed as planned. It is worth noting that the Ocean Alliance has the highest cancellation rate of 19%, and most of the canceled sailings occur on the Transific Eastbound.

In response to the falling freight rates, some container lines have taken rate adjustment measures:

Hapag-Lloyd recently announced a new general increase (GRI) for cargo from all Far East origins to North Europe, with an increase of $1,200 per 20-foot container and $2000 per 40-foot container.

On the Far East to West Mediterranean trade, the comprehensive GRI is $1,750 per 2-foot container and $2,500 per 40-foot container.

From October 15, CMA CGM will impose a peak season sur on the Westbound Transatlantic trade of $400 for a 20-foot container and $600 for a 40-foot container.

◤ Operating challenges exacerbate market weakness

Recent operational challenges including typhoons in South China and port strikes in Italy have further roiled schedules, leading to worsening congestion on the-Europe trade lane.

After the typhoons, Hapag-Lloyd warned customers that it might take up to a week to clear the backlog of in the region. The delays could be particularly disruptive for shippers who were trying to ship before the Golden Week holiday, said Judah Levine, research director at Freightos However, the disruptions caused by the typhoons are expected to have a minimal impact on key trade routes, as many Asia-Europe shippers may have already moved peakseason cargo and because the trans-Pacific peak season was brought forward due to tariff deadlines.

Based on the current market situation, it is recommended that enterprises with shipping plans maintain flexibility, book early, and closely monitor operational risks.