CCFI Commentary Issue 26, 2018
  Date:2018-09-05

Rates slid on most routes for tensed competition

  In this week, China export container transport market was in downturn due to sluggish performance in demand. As of the imbalance of supply-and-demand relationship, spot market rates dropped on most routes and dragged the index down. On June 22nd, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 751.13 points, down by 3.4% from previous week.

  In the Europe route, according to data released by Centre for European Economic Research (ZEW), the Euro zone ZEW Economic Sentiment Index in June was -12.6, the lowest since July 2016, indicating that the European economy has shown signs of slowing down. The transport demand also saw lack of growth. The average slot utilization rate ex Shanghai maintained at about 90%. Spot market freight rate slightly down. On June 22nd, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD834/TEU, down by 3.2% from one week ago. In the Mediterranean route, the market condition was almost similar to that on EU route, but the average slot utilization rate ex Shanghai was some better than EU route. The figure kept between 90% ~ 95% for most departed vessels. However, the spot market rate slight slid during this week. On June 22nd, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD905/TEU, down by 1.1% from last week ago.

  In the North America route, according to data released by the US Federal Reserve, the Industrial Production Index edged down 0.1 percent in May, indicating that the foundation of the US economic recovery is not stable. The transportation demand almost kept stable in the peak season. The average slot utilization rate ex Shanghai to USWC and USEC both waved between 90~95%. To defend for market shares, most carriers cut down booking rates, leading a significant sliding of the spot market rate. On June 22nd, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1194/FEU and USD2181/FEU, down by 5.7% and 2.5% respectively compared to last week.

  In the Persian Gulf route, although it was close to the end of Ramadan, the shipping demand was still in weak. Even some liner companies executed blank sailing plans, over-supply situation was not significantly improved. The average slot utilization ex Shanghai was around 90%. The spot market rate went down under pressure. On June 22nd, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD508/TEU, down by 6.6% from previous week.

  In the Australia/New Zealand route, the overall performance of the market in the recent period was sluggish, and transportation demand was relatively weak. Some liner companies continued to strictly control the supply of space, but the fundamentals of supply and demand did not improve, and the market freight rates continued to decline. On June 22nd, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD697/TEU, down by 1.8% against one week ago.

  In the South America route, the shipping demand was brisk. However, due to the expanding on the capacity supply, the market fundamental only maintained at a relative balanced level. The average slot utilization rate ex Shanghai kept around 95%. Spot market rate failed to stablize and fell significantly. On June 22nd, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1546/TEU, a week-on-week decrease of 7.6%.

  In the Japan route, cargo volume dropped slightly. Spot market rate fell. On June 22nd, freight index in the China to Japan route quoted 705.09 points, down by 4.7% compared with last week.

 

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