CCFI Commentary Issue 32, 2018
  Date:2018-09-05

Freight rates solidified in North America trade lanes

  In this week, the supply and demand relationship on China export container transport market continuously improved in general. However, spot rates diversified on different routes and the composite index of SCFI slightly rose. On August 3rd, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 890.52 points, up by 3.1% from previous week.

  In the Europe route, transporting demand was stable in traditional peak season. The average slot utilization rate ex Shanghai kept above 95% with some voyages departed with full loads. Backed by this, increased freight rate stood steadily. On August 3rd, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD935/TEU, up by 1.0% from one week ago. In the Mediterranean route, shipping demand performed little poorer than that on Europe route. The average slot utilization rate ex Shanghai was around 95%. Some carriers slightly adjusted the booking rates down to compete for market shares, which dragged market tariff  rate level slightly down. On August 3rd, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD881/TEU, down by 1.3% from last week ago.

  In the North America route, the transportation demand was relatively strong during the peak season. Meanwhile, the total space supply was cut down by carriers’ combination of trade lane services, mostly affected by the unclear outlook on Sino-US trade. Most voyages departed Shanghai with full loads and some others even over-booked. Supported by this, some carriers rose their booking rate again and spot market continued to rising. On August 3rd, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD2074/FEU and USD3099/FEU, up by 10.5% and 8.9% respectively compared to last week.

  In the Persian Gulf route, due to the unstable shipping demand and the large scale of the total capacity supplying in the previous period, the supply and demand relationship was in poor condition. To improve the market fundamental, some carriers implemented space controlling measures. The slot utilization rate of most departed vessel was distributed in range of 80% ~ 95%. Only some carriers cut their booking rate to absorb more cargo consignment while most carriers held their rate to watch. On August 3rd, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD364/TEU, down by 1.9% from previous week.

  In the Australia/New Zealand route, the demand for transportation in the market has generally risen. The average slot utilization rate ex Shanghai was over 90%, and vessels shipped with full loads. The spot market freight rate was generally flat with carriers’ little adjustment on their booking rates. On August 3rd, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD756/TEU, up by 0.3% against one week ago.

  In the South America route, as of the low market acceptance to carriers’ rate hiking plan from month beginning, most carriers had to lower their booking rates. The spot market rates fell. On August 3rd, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1576/TEU, down by 18.4% compared to last week.

  In the Japan route, shipping demand stabilized, and market rate slightly waved. On August 3rd, freight index in the China to Japan route quoted 724.29 points, up by 2.1% compared with last week.

 

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