Freight container shipping rates drive down

The near future for container shipping remains unpromising as demand drives down by western buyers. The panic and fear of a second recession has made westerners wary causing the demand to drive down deeply. The US economy is in shambles and no immediate stimulus seems in sight to give it a boost. The picture of the European economy seems even bleaker than the US economy. The emerging nations provide a fair amount of demand for freight container shipping; however they alone are not enough to fulfil the gap left by the decreased demand from Europe and US. These new markets have fledged rapidly but the demand still remains nominal when compared to the earlier demands from Western countries. Container shipping rates from Shanghai to US fell almost by 40 percent.

The Shanghai Containerized Freight Index (SFCI) surveys global trade by keeping track of container rates fro shipping which provide transport of produced goods such as textiles, furniture, shoes from China to Western countries from consumption. Shipping companies in China have considerably lost their share value. The share value of Orient Overseas (International) Ltd came down by a considerable 3.8 percent. Analysts predict that ship owners will have more time on their hands as demand further plummets due to the pinching global economy. More and more shipping companies are in a precarious position, nearing total collapse.

Many shipping companies are sitting idle due to low western demand. Christmas, which is the peak time for demand, does not seem promising this year. The companies are afraid to raise their rates in what is considered traditionally the peak season, for fear of further fallout in demand. The demand is expected to further stoop down in the next quarter.

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