CCFI Commentary Issue 27, 2018
  Date:2018-09-05

Rates rebounded on most routes for increasing demand

  In this week, China export container transport market demand performed well, fundamentals on most routes showed signs of improving. Carrier’s rate hiking plan pushed spot market rate upturned, which driving freight index rebounded. On June 29th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 821.18 points, up by 9.3% from previous week.

  In the Europe route, transporting demand kept stable as well as the market supply-and-demand relationship. The average slot utilization rate ex Shanghai stayed around 95%. Supported by the good fundamental, carrier’s lift the booking rates from early July. On June 29th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD885/TEU, up by 6.1% from one week ago. In the Mediterranean route, the supply-and-demand relationship was better than Europe route. The average slot utilization rate ex Shanghai stood above 95% with some voyages departing with full loads. However, due to most carriers’ watch-and-see strategy, spot market rates were only seen slight rising. On June 29th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD913/TEU, up by 0.9% from last week ago.

  In the North America route, transportation demand steadily increased as market would step into the peak season. In the USWC route, the average slot utilization rate ex Shanghai kept above 95% with lots of vessels departed with full loads. Most carriers implemented rate hiking plan as scheduled, and the spot market rate rocketed. On June 29th, freight rates in the route from Shanghai to USWC (contains seaborne related surcharges) quoted USD1545/FEU, up by 29.4% compared to last week. In the USEC route, backed by brisk shipping demand, most vessels were almost fully loaded. Spot market rate rebounded by the new round of GRI. On June 29th, freight rates in the route from Shanghai to USEC (contains seaborne related surcharges) quoted USD2524/FEU, up by 15.7% from previous week.

  In the Persian Gulf route, although market has stepped out of the Ramadan, the shipping demand still showed no signs of recovery. Due to the low performance of cargo volume, some carriers cut their space supply to improve the supply-and-demand imbalance situation. However, this lead to a bigger gap of the slot utilization rate among carriers which intensified the market competition. Affected by the soft fundamental, market rate continued to slip. On June 29th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD482/TEU, down by 5.1% from previous week.

  In the Australia/New Zealand route, limited recovery was seen on the cargo volume. Helped by the carriers’ space controlling measures, the average slot utilization rate ex Shanghai climbed to 90%. Due to the unknown market outlook, carriers adjusted their booking rate respectively. Spot market rates slight rebounded. On June 29th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD713/TEU, up by 2.3% against one week ago.

  In the South America route, the shipping demand strongly recovered driving by the rush cargo prior to new round of GRI. The average slot utilization rate ex shanghai maintained about 95% with some vessels over-booked. Carriers executed the GRI as scheduled which pushed spot market rate rising sharply. On June 29th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1988/TEU, jumped by 28.6% compared to last week.

  In the Japan route, shipping demand stabilized, and market rate slightly waved. On June 29th, freight index in the China to Japan route quoted 710.27 points, up by 0.7% compared with last week.

  

 

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