CCFI Commentary Issue 19, 2018
  Date:2018-09-05

Rates rose on main trade lanes

  In this week, China export container transport market performed well, transportation demand steadily increased and market fundamentals stabilized. Spot rates on Shanghai to North America and EU/MED trade lanes rose, pushing composite index up. On May 4, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 776.88 points, a week-on-week increase of 2.1%.

  In the Europe route, as per Markit, the final value of Eurozone Manufacturing PMI in April was 56.2 points and kept in expansion area, showing a solid signal on economic recontains. The transportation demand was strong in recent period. By the support of good supply-and-demand relationship, the slot utilization rate ex Shanghai stayed above 95%. The spot booking rate continued to increase slightly on the basis of the previous rate hiking. On May 4, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD788/TEU, up by 1.8% from one week ago. In the Mediterranean route, market situation was almost similar to Europe route, spot rate continued to rise. On May 4, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD756/TEU, up by 8.9% from last week ago.

  In the North America route, as per latest published data by U.S. Department of Commerce, the U.S. retail and food services sales for March 2018 were $494.6 billion, an increase of 0.6 percent. It indicated the consumption by local residents keeping in good trend and inspired the rising of transportation demand. Market saw several voyages departed with full loads and space was tightened in this week – the average slot utilization rate ex Shanghai almost reached 100%. The spot rates kept rising. On May 4, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1468/FEU and USD2433/FEU, up 4.6% and 2.6% specifically compared to last week.

  In the Persian Gulf route, the supply-and-demand relationship maintained in balance with the support of cargo rush before Ramadan. The average slot utilization rate ex Shanghai stayed around 90%. But spot rate slightly slipped due to carrier’s competition for market shares. On May 4, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD431/TEU, down by 1.1% from previous week.

  In the Australia/New Zealand, cargo volume rebounded while market performed with slight upturn. The average slot utilization rate stabled around 90%. Freight rates were almost flat. On May 4, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD837/TEU, up by 0.6% against one week ago.

  In the South America route, transportation demand kept steady. The average slot rate ex Shanghai stabilized at 95%. Some carriers decreased the booking rate from last week’s big jump, leading the spot rate sliding. On May 4, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD2086/TEU, a week-on-week decrease of 2.2%.

  In the Japan route, cargo volume and freight rate both kept stable. On May 4, freight index in the China to Japan route quoted 730.16 points, almost in line with one week ago.

 

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