CCFI Commentary Issue 30, 2018
  Date:2018-09-05

Rates slightly dropped while demand remained at high level

  In this week, China export container transport market kept in stable. Route transporting demand remained at high level, market rates on most routes dropped from relative high level, which made the composite index downwards. On July 20th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 793.76 points, a week-on week decrease of 3.9%.

  In the Europe route, with destination market entering traditional peak season, market volume was stable and the supply-and-demand relationship maintained at good level. The average slot utilization rate ex Shanghai kept above 95%, and many voyages were fully loaded. The market rates tended to be stable. Most carriers maintained their original freight rate offer, only small parts of carriers made slight adjustments to their booking rates according to the booking situations. On July 20th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD863/TEU, down by 2.2% from last week ago. In the Mediterranean route, transportation demand was generally at good level, booking situation was not as good as Europe route. The average slot utilization rate ex Shanghai waved between 90%~95%. Most carriers maintained current freight rate offer, and the market rate fluctuated slightly. On July 20th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD869/TEU, down by 2.0% from last week ago.

  In the North America route, the July 14th data showed that there were 207 thousand people first time applied for unemployment relief in the US, a new figure-low since December 1969, indicating that the US domestic labor market continued improving and further promoted domestic consumption in the United States. With destination in the peak season, transportation demand kept in relatively high level. Although Sino-US trade disputes had a negative impact on the prospects of this route, the basic facts of the route was in good condition up to now. This week, the average slot utilization rate ex Shanghai to USWC was above 97%, and many voyages were fully loaded. Due to market rates increased quite a lot in a short term, the market had some divergence upon freight rates acceptance. Some carriers adjusted freight rates due to cargo structure difference, which made spot market rates downwards slightly. On July 20th, freight rate in the route from Shanghai to USWC (contains seaborne related surcharges) quoted USD1616/FEU, down by 4.1% from last week ago. In the USEC route, due to strong transportation demand, most voyages were fully loaded, the market rate fluctuated at high level. On July 20th, freight rate in the route from Shanghai to USEC (contains seaborne related surcharges) quoted USD2650/FEU, down by 2.2% from last week ago.

  In the Persian Gulf route, the market transportation demand continued to slump, capacity supply-and-demand imbalance situation remained serious. Affected by the unstable factors in the region, the slot utilization remained at relatively low level. Carriers kept taking capacity controlling measures to reduce overall capacity, the slot utilization still showed no improvement. There were differentiations among carriers, and the slot utilization rate of most ships ex Shanghai waved between 55~85%. Affected by worse market fundamentals, spot market rate plunged. On July 20th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD371/TEU, down by 14.5% from previous week.

  In the Australia/New Zealand route, the market transportation demand was generally stable, the average slot utilization rate ex Shanghai waved between 90%~95%. As the market performance was generally calm, supply-and-demand relationship kept at a balanced level. Most carriers maintained their current booking rates. On July 20th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD737/TEU, up by 1.0% against one week ago.

  In the South America route, the cargo volume remained at high level and whole market capacity supply increased a lot. The average slot utilization rate ex shanghai maintained at 90%. Many carriers lowered their booking rates to attract more volumes and caused the following up with others. The spot market freight rate dropped significantly under pressure. On July 20th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1437/TEU, down by 9.5% compared to last week.

  In the Japan route, destination market was in slack season, and shipping demand was relatively stable at low level. On July 20th, freight index in the China to Japan route quoted 717.52 points, up by 1.8% compared with last week.

 

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