CCFI Commentary Issue 24, 2018
  Date:2018-09-05

Rates fell on most shipping routes

  In this week, China export container transport market demand kept stable. Spot rates failed to hold the position by last week’s rate hiking plans, leading to the downward of the comprehensive index. On June 8th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 806.04 points, down by 2.8% from previous week.

  In the Europe route, as market was close to the peak-season, transportation volume was seen increased steadily. This week, the average slot utilization rate ex Shanghai was above 95%. Supported by the good fundamental, only small adjustments on carriers’ booking rates were taken. Spot rates almost stabilized on the basis of the rate hiking. On June 8th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD870/TEU, slightly down by 0.7% from one week ago. In the Mediterranean route, the sign of market recovery occurred ahead of Europe route, the cargo volume kept the trend on growth. The average slot utilization rate maintained above 95%, and even the spaces on some voyages were over-booked. Backed by the bloomed market performance, some carriers raised their booking rates again. The spot market rate continued to climb. On June 8th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD904/TEU, up by 1.0% from last week ago.

  In the North America route, the overall market demand for transportation has remained stable. The average slot utilization rate ex Shanghai to USWC and USEC were both around 95% with some vessel departed with full loads. However, spot market rates to USWC and USEC both fell which eroded the rate hiking achievement. On June 8th, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1358/FEU and USD2354/FEU, down by 6.0% and 4.4% respectively compared to last week.

  In the Persian Gulf route, shipping demand continued to fall when market entered into Ramadan. Some carriers took measures to cut their space supplies to ease the situation of over capacity. The slot utilization of departed voyages diversified from 65%~90%. Some carriers lowered their booking rates for more loads which leading the market rates slightly down. On June 8th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD547/TEU, down by 1.8% from previous week.

  In the Australia/New Zealand route, cargo volume performance was lackluster and the excess capacity was more serious. The average slot utilization rate ex Shanghai slid to between 80%~90%. Influenced by the weak fundamentals, carriers cut the booking rates to defend on the market share. Spot market rates continued to fall. On June 8th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD757/TEU, down by 3.8% against one week ago.

  In the South America route, the strong market demand coupled with the effective spaces control measures of carriers, has resulted in an average slot utilization rate ex shanghai on about 95%. However, as lower acceptance to the big rate jumping by previous rate hiking, most carriers cut the booking rates accordingly for cargo competition. On June 8th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1990/TEU, a week-on-week decrease of 8.7%.

  In the Japan route, overall cargo volume was in line with previous level. Market rate fell in little. On June 8th, freight index in the China to Japan route quoted 713.23 points, down by 0.9% compared with last week.

 

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