CCFI Commentary Issue 31, 2018
  Date:2018-09-05

Spot rates surged on most main lanes by rate hiking plan

  In this week, China export container transport market showed positive trend in general with steady increased shipping demand. Spot market rates were pushed high on most shipping routes  by rate hiking plans. On July 27th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 863.59 points, up by 8.8% from previous week.

  In the Europe route, according to IHSMarkit newly released date, the flash Eurozone Manufacturing PMI in July was 55.1, up 0.2 percentage points from the previous month, indicating that the pace of recovery in the European economy has accelerated, which supporting the growth of transportation demand. As the relationship between supply and demand was in good condition, the average slot utilization rate ex Shanghai kept above 95%. Carriers implemented rate hiking plan as scheduled. On July 27th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD926/TEU, up by 7.3% from one week ago. In the Mediterranean route, the market situation is basically similar to that of the European route. The average slot utilization rate ex Shanghai was slightly lower than that of the European routes and waved between 90% and 95%. The booking rate climbed slightly. On July 27th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD893/TEU, up by 2.8% from last week ago.

  In the North America route, according to data released by the US Department of Commerce, the initial value of durable goods orders in the United States increased by 1% in June, ending a two-month losing streak, indicating that the US economy has returned to the growth trajectory, which was conducive to local consumer demand and transportation demand. As transportation demand showed a growth trend during the peak season, the space supply was slightly tight. The average slot utilization rate ex Shanghai continued to be above 95%, and some voyages were fully loaded and shipped. Affected by this, some carriers implemented the new round of GRI from month beginning. The freight rate in US West Coast route performed stronger than the US East Coast route. On July 27th, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD1877/FEU and USD2846/FEU, up by 16.2% and 7.4% respectively compared to last week.

  In the Persian Gulf route, the market transportation demand hovered in a relative sluggish situation. In order to improve the market fundamentals, some carriers continued their effort on space supply controlling measures, which helped the slot utilization rate ex Shanghai stood at about 85%. The spot market rate showed signs to stabilize after continuous declining. On July 27th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD371/TEU, almost in line with previous week.

  In the Australia/New Zealand route, shipping demand was steady. Supported by carriers’ continuous space controlling policy, the market fundamentals got improved. Spot market rate climbed by some carriers’ rate hiking plan. On July 27th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD754/TEU, up by 2.3% against one week ago.

  In the South America route, the shipping demand continued to be strong, leading a tight space supply. The average slot utilization rate ex shanghai were almost close to 100%. The spot market rate increased sharply by carriers’ execution of new round of GRI. On July 27th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1931/TEU, surged by 34.4% compared to last week.

  In the Japan route, shipping demand and market rate both was stable. On July 27th, freight index in the China to Japan route quoted 709.32 points, down by 1.1% compared with last week.

  

 

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