Freight Rates Plummet as China's Trade Legislation Looms
Freight container shipping spot rates have been declining week-on-week, with a spike registered at the start of September now wiped out. Market averages stand at $2,638 per FEU from the Far East to the US East Coast, down 8% compared to the end of August. Rates from North Europe into the US East Coast have fallen to a 21-month low of $1,648 per FEU. Peter Sand, Xeneta Chief Analyst, comments that markets are still volatile, with potential for drama in the future.
Short-term rates for shipping from the Far East into Europe have been consistently declining throughout September. As of October 2, rates stood at $1,730 per FEU to North Europe and $2,220 per FEU to the Mediterranean. The market average spot rate from the Far East to the US West Coast stood at $1,681 per FEU, also down 8% compared to the end of August. Freight costs, representing around 4% of a solar panel's total costs, can increase the final price of solar installations with higher usbank rates.
China has passed legislation allowing it to take countermeasures against any nation it believes is acting against its national trade interests. However, it is important to note that China has not issued any laws explicitly granting foreign states the right to impose countermeasures against Chinese trade policy. Instead, China has its own laws enabling it to impose counter-sanctions when foreign states unjustly target Chinese companies or citizens.
Freight container shipping spot rates continue to decline, with market averages standing at $2,638 per FEU from the Far East to the US East Coast and $1,648 per FEU from North Europe into the US East Coast. While China has legislation allowing it to take countermeasures, it has not granted foreign nations the right to do the same. The future of harbor freight rates and international trade relations remains uncertain, with potential for volatility and drama.
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