SCFI rises for three consecutive weeks, will Europe-US routes move inversely? With the Federal Reserve raising rates in December, are foreign trade orders about to change?
Recently, the Shanghai Containerized Freight Index (SCFI) was reported at 3681.34 points, marking a slight weekly increase of 1.76 points, or just 0.05%. Although this represents the third consecutive week of modest recovery, behind these seemingly flat figures lies a subtle divergence in the trends of the U.S. and European shipping routes, as well as the macroeconomic shadow cast by the upcoming Federal Reserve policy meeting scheduled for October 27-28.
US stocks: Decline narrows, weak consolidation
From the perspective of U.S. shipping routes, the downward slope is slowing. The freight rate from Shanghai to major West Coast ports in the U.S. is reported at $7,521/FEU, down 0.05% week-on-week; to the East Coast, it is reported at $10,388/FEU, down 0.16% week-on-week. This marks the second consecutive week of decline for both the East and West Coasts, though the extent of the drop is smaller than in the previous period. A narrowing decline is usually interpreted as a reduction in selling pressure, indicating that the prior accumulated spot freight rate adjustments are approaching a stage of temporary clearance. However, ‘slower decline’ does not equate to ‘an impending rebound.’ At present, there is no strong restocking signal on the demand side, making this more akin to a weak consolidation at a high plateau.
European Market: Uptrend Stalls, Price Increase Effectiveness in Question
In contrast, the upward trend on European routes has clearly cooled. The Shanghai to major European ports rate is reported at $2,351/TEU, a weekly increase of 0.69%; the Mediterranean route is reported at $3,255/TEU, a weekly increase of 0.15%. Compared to the previous period when the Mediterranean route surged by a strong $248, this period sees only a minor increase of $5, which is almost negligible. This indicates that the transmission effect of the carriers’ previous rate increases (GRI) is rapidly diminishing. Whether the price increase can hold depends entirely on the future weeks’ capacity utilization and the persistence of the tail end of the peak season, and the upward momentum following the rate increase remains to be observed.
Weak balance: structural differentiation replaces trend-driven prosperity
Looking at the two shipping routes together: one is ‘unable to fall further,’ and the other is ‘unable to rise further.’ The three consecutive increases in the SCFI therefore need to be discounted—it is more of a weak balance during structural adjustment rather than a return of trend-driven prosperity. This coexistence of ‘structural, regional tension’ and ‘regional demand weakness’ is precisely the reality of the current shipping market.
The Federal Reserve’s December path becomes the biggest variable
The real variable lies on the macroeconomic side. In September, the Federal Reserve completed its first interest rate hike since 2023 to curb inflation. For the October meeting, the market is almost unanimously expecting no change: the CME FedWatch tool shows a 90.6% probability of maintaining the current rate in October, with only a 9.4% probability of a 25-basis-point increase. However, the suspense has been postponed to December—by then, the probability of maintaining the rate drops sharply to 25.8%, while the probability of a 25-basis-point hike rises to 67.5%, and there is a 6.7% chance of a 50-basis-point increase. In other words, the market is betting on a delayed tightening path of ‘pause in October, hike in December.’
The Tug-of-War Between Tightening Liquidity and Foreign Trade Orders
Two strands of clues thus converge. U.S. liner freight rates are highly tied to U.S. end-market demand and inventory cycles. If the Federal Reserve resumes rate hikes in December, it will further increase the cost of dollar financing and suppress U.S. retail consumption and the willingness to restock imports, which happens to be the most vulnerable aspect of current U.S. liner freight rates. European liner rates, on the other hand, are more driven by supply-side factors such as bypassing the Red Sea and the deployment of European-Korea-India slots. Demand resilience is relatively independent, but the overall volume of global trade remains constrained by the dollar liquidity environment.
Be alert to periods of macroeconomic uncertainty
In the short term, whether the weak stabilization of the SCFI can continue depends on the extent to which the second week of European route price increases is realized, as well as whether the U.S. route can shift from a ‘narrowing decline’ to stabilization. In the medium term, the tone of the Federal Reserve’s statement on October 28 regarding the December policy path, whether hawkish or dovish, will directly affect booking demand at the end of the fourth quarter through the U.S. dollar exchange rate and U.S. consumption expectations. For the foreign trade chain, this is not an inflection point at which vigilance can be relaxed, but a window period in which macroeconomic uncertainty is accumulating.
Post time: Oct-27-2026
