CCFI Commentary Issue 20, 2018
  Date:2018-09-05

Rate trend diversified with shipping demands recovering

  In this week, China export container transport market kept stable, supply-and-demand relationship maintained in balance. However, due to the differentiation in carrier’s marketing policy, spot rates on some routes rose and others fell. The comprehensive index was almost flat. On May 11, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 778.83 points, a week-on-week increase of 0.3%.

  In the Europe route, transportation demand stabilized at high level, the average slot utilization rate ex Shanghai was around 95%. Some carrier’s followed market trend to raise the booking rate, while others lowered tariff rate to maintain their market share. On May 11st, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD811/TEU, up by 2.9% from one week ago. In the Mediterranean route, cargo volume performed well, the average slot utilization rate maintained between 90% to 95%. Supported by the healthy market fundamentals, most carriers implemented new rounds of GRI, and market rates continuously rose. On May 11st, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD783/TEU, up by 3.6% from last week ago.

  In the North America route, market supply and demand relation was in well condition: the average slot utilization rate ex Shanghai to USWC and USEC were both above 95%, and some voyages departed with full loads. After consecutive rising, market rate reached a high position from “China Lunar New Year”, adding pressure on freight rate further rising. This week, most carrier adjusted back their booking rates from last week’s rate hiking plan. The 6-week-consecutive freight rate rising trend was ceased. On May 11st, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1382/FEU and USD2364/FEU, down 5.9% and 2.8% respectively compared to last week.

  In the Persian Gulf route, most markets at destination would enter Ramadan, the shipping demand rising trend was weakened. The average slot utilization rate ex Shanghai was about 90%, the supply-and-demand relationship failed to further improve. As market was in the transition period between peak and off season, carrier’s booking rate diversified. On May 11st, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD460/TEU, up by 6.7% from previous week.

  In the Australia/New Zealand, cargo volume kept steady. And with carriers’ space controlling measures, the average slot utilization rate ex Shanghai maintained around 90%. Most carriers maintained their current booking rate or increased a little bit, thereby market rate stood steadily. On May 11st, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD848/TEU, up by 1.3% against one week ago.

  In the South America route, transportation demand kept steady. The average slot utilization rate ex Shanghai was about 95%, however there was big difference among carriers. Affected by this, carriers applied disparate GRI plans in month middle: some carriers implemented rate hiking as scheduled while some others chose to reduce booking rate. Therefore freight rate difference expanded. On May 11st, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD2118/TEU, a week-on-week increase of 1.5%.

  In the Japan route, cargo volume and freight rate both kept stable. On May 11, freight index in the China to Japan route quoted 726.66 points, almost in line with one week ago.

 

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