Update and Analysis of The Global Seafreight Market This Update and Analysis of the Global Seafreight Market is exclusively for DSV Air & Sea and made by Lars Jensen CEO and partner in Vespucci Maritime. Lars Jensen has 19 years of experience in the shipping industry and has for the last 10 years worked as an independent market analyst. August 31, 2021 We keep meeting an oncoming train in the tunnel With the risk that the description of developments may come across as unduly insensitive, market developments over the past 18 months could to some degree be described as horribly repetitive – and may be about to hit another repeat. Every month, the container shipping supply chains see even more disruption, and just when it appears that there is light at the end of tunnel, it turns out that the situation could indeed deteriorate even further. Or to put it differently: We repeatedly find that the light at the end of the tunnel turns out to be yet another oncoming train. This can also be seen reflected in the development in spot rates. The spot rate index with the longest historical track record is the SCFI (Shanghai Container Freight Index), which goes back to 2009. It is defined as having the base value of 1,000 on 16 October 2009. The previous record high was set in July 2010 at an index level of 1,583, which was in the strong market rebounding from the financial crisis. At that point in time, the market was impacted by a surging demand combined with capacity shortages. This record was exceeded at the beginning of November 2020, and rates continued to increase by another 75% until they peaked around the Chinese New Year. At this point in time, there was a sense in the market that this extreme level of spot rates was far out of alignment with previous levels and that the level might come down after the Chinese New Year. It did after a brief period. Over the next seven weeks, it gradually dropped from this historic high, having declined by 11% by at the end of March. Then Suez happened. The SCFI promptly increased by another 21% over the following five weeks.
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