CCFI Commentary Issue 21, 2018
  Date:2018-09-05

Freight Rates dropped on most routes

  In this week, China export container transport market remained stable, supply-and-demand relationship on most routes was in stable. The marketing policies were seen adjusted which enhanced the competition in some trade lanes. Routes with rate decreased were more than those with increased, which pulled the comprehensive index down. On May 18th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 753.83 points, a week-on-week decrease of 3.2%.

  In the Europe route, transportation demand remained improving, the average slot utilization rate ex Shanghai Port was around 95%, and spaces on some voyages were over booked. Carriers adjusted their booking rates respectively and market tariff level dropped little in general. On May 18th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD793/TEU, down by 2.2% from one week ago. In the Mediterranean route, there was still rush cargoes to some destinations before Ramadan, and the demand-and-supply kept in well level with carriers’ space controlling measures. The average slot utilization rate ex Shanghai Port remained between 90%~95%, and even a little of voyages managed to depart with full loads. Supported by the good market fundamentals, some carriers followed the market to slightly rise the booking rate, which helped the market rate kept rising trend. On May 18th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD795/TEU, up by 1.5% from last week ago.

  In the North America route, market transportation demand almost kept stable, the supply-and-demand relationship maintained in well condition: the average slot utilization rate ex Shanghai to USWC and USEC were both about 95%. Due to the increasingly fierce competition, many carriers lowered their booking rates. The market tariff continuously fell. On May 18th, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1308/FEU and USD2331/FEU, down 5.4% and 1.4% respectively compared to last week.

  In the Persian Gulf route, destination markets came into Ramadan in this week. Supported by some expedited shipments, shipping demand maintained at certain level, helping the average slot utilization rate ex Shanghai hovered around 90%. However, as markets entered into Ramadan from Thursday, some carriers lowered their expectation of future market performance. Spot rates were up and down on different voyages and the average rate was almost in smooth. On May 18th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD459/TEU, down by 0.2% from previous week.

  In the Australia/New Zealand, cargo volume was generally stable. The average slot utilization rate ex Shanghai kept about 95% and only few voyages departed with full loads. The spot market rate was flat. In order to maintain the market share, carriers reduced their booking rate by a small margin and the average rate fell. On May 18th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD826/TEU, dropped 2.6% against one week ago.

  In the South America route, the average slot utilization rate ex Shanghai kept around 95%. Due to the low market acceptance of the rate hiking on month beginning, carriers have to give up the GRI plan in middle month. Carrier’s had to sharply cut down the booking rates to against the increasingly fierce competition, which leading to a big sliding of market rates. On May 18th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1655/TEU, a sharp dropping of 21.9% from last week.

  In the Japan route, cargo volume just kept in line with previous level, and the freight rate remained stable. On May 18th, freight index in the China to Japan route quoted 720.17 points, down by 0.9% compared to last week.

 

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