CCFI Commentary Issue 28, 2018
  Date:2018-09-05

Spot rates consolidated on main lanes backed by brisk demand

  In this week, China export container transport market demand was generally stable. Spot market rates slightly waved on most shipping routes and the composite index was flat. On July 6th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 817.40 points, slightly down by 0.5% from previous week.

  In the Europe route, transporting demand was stable when market was close to the peak season, as well as the supply-and-demand relationship maintained in well condition. The average slot utilization rate ex Shanghai kept above 90% with some voyages departing with almost full loads. There were only slight waves on the booking rates. The hiked rates stood steadily. On July 6th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD881/TEU, down by 0.5% from one week ago. In the Mediterranean route, the space supply was much intense than that on Europe route. The average slot utilization rate ex Shanghai stabilized above 95%, even voyages departing with full loads was occurred frequently.  Most carriers took wait-and-see strategy with their booking rates unchanged. Average market rate was down by small margin led some little carriers rate cutting action. On July 6th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD903/TEU, down by 1.1% from last week ago.

  In the North America route, affected by Sino-US trade disputes, some cargo owners accelerated the pace of shipments, driving the recent market transportation demand to remain at a high level. This week, the average slot utilization rate ex Shanghai was above 95%, and multiple flights were fully loaded. Due to the good fundamentals of the market, although some carriers adjusted back their freight rate after the rate hiking, the freight rate was consolidated supported by other carriers following up of the rate hiking plan. On July 6th, 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, the market transportation demand was in doldrums. Although the market still had a certain scale of capacity controlling measures, the slot utilization rate of most ships ex Shanghai was still less than 90%, and some voyages even have fallen to around 50%. Due to the serious situation of the excessive space supply, the GRI plan was cancelled by most carriers. As the competition for cargoes was more and more intensified, the spot market rate continued to decline. On July 6th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD470/TEU, down by 2.5% from previous week.

  In the Australia/New Zealand route, shipping demand performed in line with previous weeks. The average slot utilization rate ex Shanghai maintained between 80% ~ 90%. Due to the overall stability of the market fundamentals, the freight rate was stable. On July 6th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD723/TEU, up by 1.4% against one week ago.

  In the South America route, the cargo volume remained at high level, and the average slot utilization rate ex shanghai maintained above 90%. Since most carriers increased their booking rates by respective margins, the difference in freight rates has made the diversity on carriers’ vessel slot utilization rate. In order to improve the loading performance, some carriers lowered their booking rates and caused the following up with others. The spot market freight rate dropped significantly. On July 6th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1737/TEU, down by 12.6% compared to last week.

  In the Japan route, shipping demand was stable as well as the market rate. On July 6th, freight index in the China to Japan route quoted 721.11 points, up by 1.5% compared with last week.

 

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