© Archyde.com. The fear of R… The biggest drop in shipping rates in 13 years
Sea freight rates fell the most in 13 years. Concerns are growing that the won-dollar exchange rate will exceed the 1,400 won level as a dark cloud is forming in the business of shipping companies that have earned more than 14 trillion won in foreign currency in the first half of this year alone.
According to the shipping industry on the 4th, the Shanghai Container Freight Index (SCFI), a global shipping rate indicator, recorded 2847.62, down 306.64 points from the previous week on the 2nd. It was the biggest drop since 2009 when SCFI statistics were compiled. It is the first time since April 23 (2979.76) of last year that this index fell below 3000. Compared to the all-time high on January 7 of this year (5109.6), it fell by 44.26%.
The Baltic Freight Index (BDI), an indicator of freight rates for bulk carriers carrying iron ore and coal, also fell 52 points on the 31st of last month to 965, the lowest since June 12, 2020 (923).
Due to the sharp drop in shipping rates, major domestic shipping companies such as HMM, Pan Ocean, and Korea Shipping are also expected to significantly reduce their foreign currency freight rates. In the first half of this year, the transportation surplus (current account item), which refers to the net profit in foreign currency transportation charges received by Korean shipping companies for transporting cargo and personnel, reached $10.635.6 billion (regarding 14.49 trillion won). It accounted for 42.9% of the current account surplus ($24.782 billion) in the first half of this year.
If the shipping company, which served as a ‘dollar safety plate’ along with semiconductors, falters, it is expected to take a hit to the foreign exchange market and the current account. The won-dollar exchange rate on the 2nd closed at 1,362 won and 60, up 7 won by 70, and was the highest since April 1, 2009 (1,379, 50). Some experts are concerned that the exchange rate might soar to more than 1,400 won per dollar if the dollar inflow to shipping companies decreases.
By Kim Ik-hwan, staff reporter [email protected]
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