The Shanghai futures market is pointing to a significant downturn in container freight rates, with analysts at Asia-based container consultancy Linerlytica predicting a dramatic 70% drop in rates for shipments from Asia to Europe by June next year.
This forecast is based on trends observed in the Containerized Freight Index Futures (CoFIF), which has been traded on the Shanghai International Energy Exchange—a subsidiary of the Shanghai Future Exchange—since its inception a year ago.
While the anticipated decline isn’t as severe as the steep rate collapse witnessed at the end of 2022, Linerlytica’s latest market update suggests that freight futures prices are expected to continue falling over the next 12 months. Analysts see no signs of a rebound by the end of this year, nor do they expect a repeat of the post-Chinese New Year rate rally in 2025.
So far, carriers have been unable to halt the ongoing decline in rates. The Shanghai Containerized Freight Index (SCFI) has already dropped 12% to North Europe from its peak in July, with a significant 7.3% decrease last week overshadowing the relatively mild 1% to 3% week-over-week declines seen over the previous month.
HSBC’s recent freight market report also echoed these concerns, noting that rates for Europe and the Mediterranean are likely to continue softening due to increased capacity as new vessels enter operation.
