CCFI Commentary Issue 22, 2018
  Date:2018-09-05

Carriers implemented rate hiking plans on some routes

  In this week, China export container transport market kept in stable, supply-and-demand relationship was improved on most routes. Carriers’ marketing policy differentiated: the new round of rate hiking plan was only implemented on some trade lanes. The comprehensive index was slightly increased. On May 25th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 764.34 points, a week-on-week increase of 1.4%.

  In the Europe route, there was steady increase on the transportation demand, which helped the average slot utilization rate ex Shanghai standing above 95%. Due to active space booking performance, some of the carriers lift their booking rates. On May 25th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD825/TEU, increased by 4.0% from one week ago. In the Mediterranean route, supported by ample cargo volume and carriers’ space controlling measures, the supply and demand relationship kept in good condition. The average slot utilization rate ex Shanghai Port climbed to 95% and above, and some vessels departed with full loads. The well performed fundamental inspired carriers to further lift their booking rates. On May 25th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD848/TEU, up by 6.7% from last week ago.

  In the North America route, the latest data showed that the US April retail sales recorded on rate of 0.3%, which was in line with expectations and was recorded for two consecutive months.. Market overall transport demand remained stable. The average slot utilization rate ex Shanghai to USWC and USEC both maintained at around 95%, but there was big difference among the carriers. With regard to the market, the market tariff continued on waving. Few carriers with lower loading performance cut their rates to stretch more cargo volumes, some other carriers followed their path and hence market rate slipped overall. On May 25th, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1283/FEU and USD2271/FEU, down 1.9% and 2.6% respectively compared to last week.

  In the Persian Gulf route, as destination markets came into Ramadan, transportation demand was then affected to fall. However, by the effort of carriers’ space reduction measures, the average slot utilization rate ex Shanghai maintained around 90%. As market fundamental was in generally good condition, carriers executed GRI plan for voyages departed from June 1st which pushed spot rate rising. On May 25th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD484/TEU, up by 5.4% from previous week.

  In the Australia/New Zealand, cargo volume stabilized at certain level, and the average slot utilization rate ex Shanghai was waved within 90% to 95%. The freight rate was in generally soft. Carriers reduced their space booking rates to defend against the competition, which dragged the market rate down. On May 25th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD810/TEU, dropped 1.9% against one week ago.

  In the South America route, there was a strong shipping demand from market. The average slot utilization rate ex Shanghai stood above 95% and some voyages were fully loaded. As the big sliding of the freight rate in last week, most carriers implemented new round of rate hiking in order to restore the freight rates. The spot rate rebounded. On May 25th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1849/TEU, rebounded of 11.7% from last week.

  In the Japan route, market was in traditional off-season. The supply and demand balance was in weak. Market rates kept sliding. On May 25th, freight index in the China to Japan route quoted 717.68 points, down by 0.3% compared to last week.

 

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