CCFI Commentary Issue 34, 2018
  Date:2018-09-05

Freight rates diversified on routes

  In this week, China export container shipping market had strong transportation demand on most shipping routes. However, due to the market expectation differentiation of the market participants, the freight rates of the routes have risen and fallen, and the comprehensive index has remained basically the same. On August 17th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 891.83 points, slightly down by 0.2% compared with previous week.

  In the Europe route, the transport demand performed well during the peak season, the average slot utilization rate ex Shanghai kept above 95% with some vessels departing with full loads. However, most carriers gave up the new round of GRI plan in order to maintain customers’ relationships, and even offered some preferential price. Spot market rate thus dropped slightly. On August 17th, freight rate in the route from Shanghai to Europe (contains seaborne related surcharges) quoted USD928/TEU, down by 2.1% from last week ago. In the Mediterranean route, strong demand performance has led to tighter market situation, and almost all ships departed Shanghai port with full loading. Backed by the strong fundamentals, some carriers increased the booking rates. On August 17th, freight rate in the route from Shanghai to Mediterranean (contains seaborne related surcharges) quoted USD909/TEU, up by 1.6% from last week ago.

  In the North America route, shipping market was in the traditional peak season, and cargo owners’ accelerating on shipment arrangement further spurred the shipping demand. At the same time, due to carriers’ space cutting measures, the total supply dropped which leading to a tension market situation. Most vessels departed Shanghai with full loads. Most carriers had successively implemented the GRI plan after wait and see, and the booking rate hiked more on the USEC route. On August 17th, freight rates in the routes from Shanghai to USWC and USEC (contains seaborne related surcharges) quoted USD2086/FEU and USD3317/FEU, up by 0.9% and 6.9% respectively compared to last week.

  In the Persian Gulf route, the transportation demand was relatively weak. At the same time, as the destination was about to enter the Eid al-Adha public holiday, the cargo performance was even softer than the previous period. Although the market capacity supply had declined to some extent under the measures of some carriers to withdraw the ships, the effect on the improving of market was weak. This week, the average slot utilization rate ex Shanghai was above 80%, and some of the vessels almost reached 90%. In view of the lack of demand, most carriers had made a small downward adjustment to their respective booking rates to compete for cargoes. On August 17th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD357/TEU, down by 4.3% from previous week.

  In the Australia/New Zealand route, the market transportation demand was generally stable, and the average slot utilization rate ex Shanghai was about 95%. Affected by the upgrade of some service routes, the overall capacity of the market increased. In order to maintain the market shares, many carriers lowered their market booking rates. On August 17th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD663/TEU, down by 8.8% against one week ago.

  In the South America route, the market volume remained at a high level, and the average slot utilization rate ex shanghai kept above 95%. However, due to diversify on carriers’ booking rate by the inconsistent rate hiking plan from last week, some carriers had to adjust their tariff rate down in order to keep competitive. On August 17th, freight rate in the Shanghai-South America route (contains seaborne related surcharges) quoted USD1607/TEU, down by 12.2% compared to last week.

  In the Japan route, shipping demand was stable as well as the freight rate. On August 17th, freight index in the China to Japan route quoted 717.03 points, almost kept in line with last week.

 

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