CCFI Commentary Issue 35, 2018
  Date:2018-09-05

Freight rates fluctuated within a narrow range

  In this week, the China export container transportation demand was relative strong in most routes. Freight rates fluctuated and the composite index of SCFI slightly rose. On August 24th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 901.66 points, up by 1.1% from previous week.

  In the Europe route, transporting demand was strong in the traditional peak season and space supply seemed tight on some voyages. Many vessels departed with full loads. Supported by the strong fundamental, some carriers increased their booking rate,which leaded the spot rates move upward. On August 24th, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) quoted USD959/TEU, up by 3.3% from one week ago. In the Mediterranean route, market situation was almost similar with that on Europe route. The average slot utilization rate ex Shanghai was above 95% with some of them departed with full loads. Some carriers lift their tariff rates. On August 24th, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) quoted USD915/TEU, slightly up by 0.7% from last week ago.

  In the North America route, there was sufficient cargo volume during the peak season. At the same time, cargo owners accelerated their pace of cargo delivery as the Sino-US trade war continued. Also affected by carriers’ space cutting measures, the space was in shortage on most calling vessels. The increased spot market rate from last week stood steadily and went higher by some carriers following on the rate hiking plan. On August 24th, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) quoted USD2126/FEU and USD3329/FEU, up by 1.9% and 0.4% respectively compared to last week.

  In the Persian Gulf route, affected by the unstable situation at the destination region and the large scale of the existing capacity supply, carriers took measures to control the total capacity supply in order to improve the market fundamentals. The average slot utilization rate ex Shanghai  was distributed in range of 85% ~ 90%. Some carriers implemented Rate Restoration Program to  boost the market freight rate. On August 24th, freight rate in the Shanghai to Persian Gulf route (including seaborne related surcharges) quoted USD392/TEU, up by 9.8% from previous week.

  In the Australia/New Zealand route, the demand for transportation was stable. As the total space supply expanded, the slot utilization among carriers services diversified. However, as the capacity surplus situation became more and more serious, it intensified the competition. Most carriers downed their booking rates for more shipments. Spot market rates dropped as a consequence of competition. On August 24th, freight rate in the Shanghai to Australia/New Zealand route (including seaborne related surcharges) quoted USD621/TEU, greatly down by 6.3% against one week ago.

  In the South America route, the cargo volume declined this week. The average slot utilization rate ex Shanghai was around 95%. The spot market rate continued dropping after freight rate hiking plan, competition tightened and the spot rate tumbled. On August 24th, freight rate in the Shanghai-South America route (including seaborne related surcharges) quoted USD1448/TEU, down by 9.9% compared to last week.

  In the Japan route, shipping demand stabilized, and market rate was slightly upward. On August 24th, freight index in the China to Japan route quoted 729.35 points, up by 1.7% compared with last week.

 

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