SCFI Falls for a Third Straight Week Freight Market Weakness Becomes Clear

The latest SCFI figures clearly show that the container freight market has entered a downward phase.

After holding relatively firm at the start of the year, freight rates are now weakening ahead of the Lunar New Year.

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SCFI Drops Below 1,500 Points for the First Time in Weeks

The Shanghai Containerized Freight Index released on January 23 fell 7 percent week on week to 1,458 points.

This marks the third consecutive weekly decline and the first drop below the 1,500 level in roughly one and a half months.

Even trade lanes that had remained resilient, such as the Middle East and Mediterranean routes, recorded noticeable declines.

This suggests that the overall tone of the market has shifted clearly toward a downward trend.

Spot Rates Decline Across All Major Trade Lanes

On the Trans-Pacific route to the US West Coast, spot rates fell 5 percent to 2,084 dollars per 40-foot container.

Rates to the US East Coast dropped 9 percent to 2,896 dollars, marking the first decline in six weeks.

The rate increases that carriers had pushed through at the beginning of the year have now largely been erased.

European routes also weakened, with North Europe rates falling to 1,595 dollars per 20-foot container.

Mediterranean rates declined to 2,756 dollars, while Middle East rates saw a sharp 24 percent drop to 1,288 dollars.

South America West Coast rates slipped below the 1,000-dollar level for the first time since last year.

• Trans-Pacific rates lost early-year gains
• European demand momentum weakened
• Oversupply pressure became visible in Middle East trades

Lunar New Year Demand Fades Earlier Than Expected

The primary driver behind the broad-based decline is the early slowdown in pre-Lunar New Year demand.

While shippers usually continue front-loading cargo until late January, demand this year softened much earlier.

Carriers attempted to stabilize rates through blank sailings and capacity discipline.

However, cargo volumes were not strong enough to support these supply controls.

Structural Oversupply Remains a Key Issue

Another important factor is the continued delivery of newbuild vessels.

While spot rates are declining, global fleet capacity remains elevated.

The sharp drop in Middle East rates highlights that capacity adjustments are not keeping pace with weakening demand.

As long as this structural imbalance persists, a strong rate rebound appears unlikely.

Outlook and Key Risks Ahead

In the short term, freight demand is expected to remain soft through the Lunar New Year and into late February.

Rate recovery drivers remain limited, pointing to continued weakness or sideways movement.

At the same time, carriers are likely to intensify blank sailings after the holidays to defend pricing.

This raises the risk of a familiar scenario where rates are lower but space availability suddenly tightens.

Shippers should therefore monitor both pricing trends and carrier capacity strategies carefully.