CCFI Commentary Issue 23, 2018
  Date:2018-09-05

Rate hiking plans were implemented on most routes

  In this week, China export container transport market kept in up trend, supply-and-demand relationship was in good condition on most trade lanes. Carriers implemented a new round of rate hiking plan which pushed spot rate up. The composite index rose accordingly. On June 1st, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 829.09 points, a week-on-week increase of 8.5%.

  In the Europe route, transportation demand stabilized at certain level. But with delivery of new mega vessels, the capacity supply gradually increased. This week, the average slot utilization rate ex Shanghai slid to under 90%. Although carriers collected the GRI as scheduled, the increase was limited due to competition for cargoes. On June 1st, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD876/TEU, up by 6.2% from one week ago. In the Mediterranean route, the cargo volume growth was stable. Added by some rush cargo from shippers who wanted to avoid the increase on freight cost, the space was seen to be tight. The average slot utilization rate rose to above 95% with some voyage departing with full loads. Supported by the healthy market fundamentals, carriers lifted up the booking rates again. The market spot rate kept rising. On June 1st, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD895/TEU, up by 5.5% from last week ago. After 7-weeks-consevtive increase from middle April, it achieved a cumulative increase of 49.1%

  In the North America route, cargo volume performed well. However, the total capacity increased steadily due to absorbing cascaded capacity from Europe trade lanes, which bring pressure to the supply-and-demand balance. The average slot utilization rate ex Shanghai to USWC and USEC both kept above 90%. Most carriers charged GRI for new booking from this week, and the spot market freight rates rose by a large margin. On June 1st, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1445/FEU and USD2463/FEU, up by 12.6% and 8.5% respectively compared to last week.

  In the Persian Gulf route, shipping demand continued to fall. But with the help from carriers’ large scale space cutting measures, the average slot utilization rate ex Shanghai still maintained about 90%. Spot market rate increased by carriers’ rate hiking plans. On June 1st, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD557/TEU, up by 15.1% from previous week.

  In the Australia/New Zealand, cargo volume showed signs to decline. Affected by this, the average slot utilization rate ex Shanghai slid to around 90%. Carriers lowered their booking rates for cargo competition. On June 1st, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD787/TEU, down by 2.8% against one week ago.

  In the South America route, plenty of transportation demand made the average slot utilization rate ex Shanghai stood above 95% and even some voyages were over-booked. Carriers followed the pace to raise their booking rates. On June 1st, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD2331/TEU, a week-on-week increase of 19.3%.

  In the Japan route, cargo volume was almost in stable. There was a slight drop on freight rates. On June 1st, freight index in the China to Japan route quoted 719.94 points, down by 1.4% compared with last week.

 

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