CCFI Commentary Issue 33, 2018
  Date:2018-09-05

Freight rates stood steadily backed by brisk demand

  In this week, China export container shipping demand maintained at healthy level. Spot market rates thus stood steadily on main shipping routes. On August 10th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 893.88 points, slightly up by 0.4% compared with previous week.

  In the Europe route, shipping demand was stable in peak season and the demand-supply balance remained in healthy degree. The average slot utilization rate ex Shanghai kept above 98%, and some voyages had to roll-over some containers to next voyage due to over-booking. Backed by the strong fundamental, some carriers increased the booking rate which pushed the freight climbing up. On August 10th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD948/TEU, up by 1.4% from last week ago. In the Mediterranean route, market was almost similar with that on Europe route. As some voyages were temporarily canceled, the average slot utilization rate ex Shanghai was close to 100%. On August 10th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD895/TEU, up by 1.6% from last week ago.

  In the North America route, accordingly to newly published data, the US GDP growth rate would be 3.9% in the second quarter of 2018, and the annual growth rate in 2018 was expected to be 3%,  which was the first time to reach 3% since 2005. The Michigan Consumer Sentiment Index in July was 97.9 and exceeded expectations from markets. It showed that the US economic expansion and domestic consumption were in a stable recovering trend. As the market was in traditional peak season of transportation, the shipping demand remained high. And as some clients worried about the outlook of the Sino-US trade friction, they accelerated their pace of shipment arrangement. Both factors spurred the shipping demand increasing. Meanwhile, carriers cut the space supplying through optimizing their services which exacerbated the tension situation of space. Over-booking frequently occurred on ships ex Shanghai port. On August 10th, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD2068/FEU and USD3102/FEU, almost kept in line with previous week freight level after increased.

  In the Persian Gulf route, the regional instability factors continued to fertilize and brought adverse effects on the shipping demand. Under the effort by carriers’ space supply controlling measures, the average slot utilization rate ex Shanghai was around 85%. Supported by the improved market fundamental, the spot market rate stabilized. On August 10th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD373/TEU, up by 2.5% from previous week.

  In the Australia/New Zealand route, the market transportation demand remained stable, and the average slot utilization rate ex Shanghai was about 95%. Some carriers adjusted their booking rates individually and the spot market waved in small range. On August 10th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD727/TEU, down by 3.8% against one week ago.

  In the South America route, the cargo volume kept in exuberant and the average slot utilization rate ex shanghai kept above 95%. Due to the healthy market fundamental, most carriers increased their booking rate and pushed spot rate level upward. On August 10th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1830/TEU, up by 16.1% compared to last week.

  In the Japan route, shipping demand was stable as well as the freight rate. On August 10th, freight index in the China to Japan route quoted 717.29 points, down by 1.0% compared with last week.

  

 

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