SIMIC

KEY container shipping freight indexes have surged by as much as 30 per cent in recent weeks as shippers rush to meet a pause 145 per cent tariffs on Chinese imports into the US, reports UK's Seatrade Maritime News.

The Shanghai Containerised Freight Index (SCFI) for the week ended May 30 was up 30 per cent at 2072.71 points an increase of 486.5 points on the previous week.



The sharp rise in container spot rates comes as the market reacts to an agreement earlier in the month between the US and China which saw a 145 per cent tariff on Chinese imports reduced to 30 per cent for a period of 90 days from May 14 while the two sides continue negotiations on reciprocal trade relations.



Major lines reacted to the news with the reversal of decisions suspend services between China and the US. According to Alphaliner these included Zim with the resumption of its Central China Express Service and MSC with new sailings for the China - US west coast 'Orient' service, which had previously had no sailings advertised after May 3.



A number of smaller lines are also reported to have re-entered the transpacific including KMTC, Heung-A and CULines.



Analyst Linerlytica reported that over the next four weeks lines will increase capacity by around 50 per cent on the transpacific trade to an average of 560,000 TEU from 377,000 TEU in the week beginning May 5.



Meanwhile Drewry's World Container Index (WCI) reported a more modest, but still significant increase of 10 per cent over the previous week to US$2,508 per FEU. Drewry noted the WCI had increased 21 per cent over the past three weeks in response to the Trump administration's pause on tariffs.



In recent weeks freight rates between China and the US have risen sharply. The rate for Shanghai to Los Angeles was up 17 per cent at $3,738 per FEU, while Shanghai - New York increased 14 per cent to $5,172 per FEU.



"The latest sudden, short-term strengthening in supply-demand balance in global container shipping has reversed the trend of declining rates which had started in January," said Drewry.