European and American routes: freight rates are under pressure and structural contradictions coexist▼

Demand continues to be weak

The weak recovery of consumer demand in Europe and the United States, the cooling of the US labor market (February non-agricultural data is lower than expected) and the high terminal retail inventory have limited cargo growth. Although the number of European and American buyers at the Canton Fair in 2024 has rebounded, the actual order conversion is limited, and short-term export demand is unlikely to show explosive growth.

Capacity and cost game

The Red Sea crisis has pushed up hidden costs: the continued war in the Middle East has caused the Asia-Europe route to bypass the Cape of Good Hope, and about 7% of the global shipping capacity has been occupied, extending the ship turnover cycle by 10-14 days. Shipping companies pass on costs by raising fuel surcharges (BAF) and emergency fuel surcharges (EBS), but spot market freight rates are still weak due to insufficient demand.

Port congestion exacerbates efficiency loss: Due to bad weather and a surge in ships, Asian hub ports such as Shanghai and Ningbo have extended container detention time to 2.5-4 days. In addition, the low degree of automation in ports on the eastern U.S. has limited loading and unloading efficiency of large ships with 10,000 TEUs, further compressing effective shipping capacity.

Freight rate differentiation and strategy adjustment

The long-term contract price on the European route has been locked at a high level, but the spot market freight rate has "inverted" (spot prices are lower than contract prices). Shipping companies have tried to support freight rates by reducing flights and controlling cabins (7% of flights on North American routes were canceled in March) and shouting price increases, but the actual effect depends on the volume in March. Affected by the expectations of Trump's tariff policy, the U.S. route has been affected by the early shipment of cargo owners concentrated at the end of 2024, resulting in a demand gap in the first quarter of 2025. The freight rates of the West and East Coast of the U.S. fell by more than 17% in a single week in February, falling below the key points of US$3,000/FEU and US$4,000/FEU.

Australian routes: freight rates fall and regional differentiation accelerates ▼

Demand seasonal decline

The demand for personal items such as furniture and electrical appliances has entered the off-season, coupled with the cooling of the Australian real estate market, the SCFI index of the Australia-New Zealand route fell by 15.6% month-on-month in March. Market competition and capacity release Small ship companies have launched low-price strategies to compete for market share. Some freight forwarding companies have compressed costs through the "package + consolidation" model, resulting in further declines in market freight rates. New shipbuilding capacity is gradually released (3 million TEUs will be added in 2024), and the Red Sea crisis has not directly affected the Australian route. The pressure of supply and demand imbalance is prominent. Shipping companies have relieved pressure by temporarily suspending voyages (such as reducing non-popular ports), but the effect is limited.

Policy and cost constraints

Australian customs has tightened inspections on wood products, food and other commodities, and additional costs such as fumigation fees and customs clearance fees have increased, weakening the attractiveness of low-price strategies. The environmental regulations of the International Maritime Organization (IMO) promote the renewal of ships. Some shipping companies will pass on the compliance costs to cargo owners, which may push up transportation costs in the long term, but the impact on the spot market is relatively weak in the short term.

Long-term trends and risk warnings▼

Global supply chain resilience challenges

The Red Sea crisis, port congestion and geopolitical risks continue to disturb the market. Geopolitical factors such as ship detours and strike negotiations may lead to a short-term rebound in freight rates, but demand fundamentals determine the medium- and long-term downward trend. Shipping companies lock in profits through long-term contract prices (long-term contract freight rates in 2025 are expected to be higher than in 2024), but spot market fluctuations will continue.

Structural opportunities and strategic recommendations

European and American lines: Pay attention to changes in cargo volume after the tariff policy is implemented in late March, and flexibly choose shipping dates to avoid possible freight rate fluctuations. Australian lines: Take advantage of the off-season freight rate advantage and plan high value-added cargo transportation in advance.

Conclusion: In the second half of March, freight rates on Europe, America and Australia routes will continue to be weak, but the decline of Europe and America routes may narrow due to the Red Sea crisis and port congestion; the contradiction between supply and demand on Australia routes is more prominent, and freight rates may fall further. It is recommended that shippers pay close attention to the dynamics of shipping companies' capacity adjustments, flexibly choose transportation plans based on their own needs, and be vigilant to short-term risks brought about by geopolitical and policy changes.