CCFI Commentary Issue 18, 2018
  Date:2018-09-05

Demand Improving and Freight Rate Rising

  In the week ending April 27, China export box transport market sees transport demand improves. Box liners in many ocean-going services push out freight rate increase plan, leading spot rate going north and the comprehensive index rising. On April 27, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quotes 760.67points, a week-on-week increase of 12.8%.

  Cargo volume and transport demand increase in the Europe route, where the slot utilization rate in most services almost 100%. For the hot demand, box liners hike booking rate largely, leading spot rate rising quickly. On April 27, freight rate in the routes from Shanghai to the Europe (covering seaborne surcharges) quotes USD774/TEU, a large increase of 32.5% against one week ago. In the Mediterranean route, the market has a similar performance as that in the Europe route, with demand/supply condition improving and the average slot utilization rate bounding to around 95%. Most box liners increase booking rate, but smaller than their counterparts in the Europe route, with spot rate growing. On April 27, freight rate in the routes from Shanghai to the Mediterranean (covering seaborne surcharges) quotes USD694/TEU, increasing by 15.5% comparing with one week ago.

  In the North America route, cargo volume and transport demand grows gradually. The average slot utilization rate in the USWC is around 95%, with some even 100%. Most box liners announce to hike freight rate as scheduled, leading spot rate rising largely. On April 27, freight rates in the routes from Shanghai to USWC (covering seaborne surcharges) quote USD1403/FEU, surging by 21.8% against one week ago. In the USEC service, as transport market performs well, the average slot utilization rate in most services are nearly 100%. Spot rate grows generally, and booking rate rises. On April 27, freight rates in the routes from Shanghai to USEC (covering seaborne surcharges) quote USD2371/FEU, up by 8.1% comparing with last week.

  In the Persian Gulf route, as Ramadan is coming at the destination, cargo owners space to go shipment, which boosts transport demand. Simultaneously, owing to capacity supply shrinks somehow, demand/supply condition improves and the average slot utilization rate amounts to around 90%, with some even 100%. Nevertheless, owing to the large increase previously, spot rate begins to slip. On April 27, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD436/TEU, tumbling by 5.2% comparing with one week ago.

  Transport demand stabilizes and demand/supply condition recovers somehow in the Australia/New Zealand route, where the average slot utilization rate is above 90%. The oversupply of capacity worsens, leading spot rate sliding further. On April 27, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne surcharges) quotes USD832/TEU, almost in line with one week ago.

  Transport demand keeps stable in the South America route, where demand/supply condition improves somehow and the average slot utilization rate rises to above 95%, with some even 100%. Box liners carry out freight rate increase plan as schedule, boosting spot rate rising largely. On April 27, freight rate in the Shanghai-South America route (covering seaborne surcharges) has a week-on-week increase of 20.7% to USD2133/TEU.

  In the Japan route, cargo volume and freight rate keep stable. On April 27, freight index in the China-Japan route quotes 726.78points, up by 1.4% against one week ago.

  

 

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