|CCFI Commentary Issue 03, 2013|
|Weekly Report of China Export Container Transport Market
(CCFI Commentary in Issue 03, 2013)
Volume rebound buoys index
China export box market experienced a moderate recovery in the first week of 2013. Massive cut in capacity and earlier export rush before the Lunar New Year holiday gave some support to recent rate restoration. Rates rose slightly on some trade lanes.
On Jan. 4, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE) quoted at 1109.89 points, barely changed from last week, while the Shanghai Containerized Freight Index (SCFI) soared by 1.0% to 1148.08 points
Despite the flat development of volume this week, the average slot utilization rate for North Europe service maintained in the range of 85%-90% as liner players still kept a strict control on capacity. Some lines carried out rate increase plan this week, with an increase of around $200/TEU.
On Jan. 4, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of North Europe surged by 4.3% to $1270/TEU from a week earlier.
Meanwhile, the average slot utilization rate for the Mediterranean service reached 90% this week, and more carriers started to implement the planned mid-Jan rate restoration.
On Jan. 4, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Mediterranean posted a 4.9% increase from a week ago to $1158/TEU.
Owing to the winter capacity redundancy by lines, rates for services from China to North Europe and Mediterranean firmed up. On Jan. 4, the North Europe and Mediterranean components of CCFI remarked at 1449.96 points and 1317.38 points respectively, up by 2.7% and 11.9% compared to the corresponding period of last month.
On the North America trade, volumes have stabilized since last December, seeing the average slot utilization rate for the USWC and USEC service staying 95% above this week. It was reported that some ships were even fully loaded. Accordingly, rates kept stable. On Jan 4, the CCFI showed that the freight index of USWC service and USEC service quoted at 1066.47 points and 1222.40 points respectively, almost unchanged from last week. The two indices came back to the level a month ago.
Positive news for the North America market was that employers at USEC and US Gulf ports concluded a preliminary agreement with local labor unions on Dec.29, which removed the threat of potential strike involving 14,500 stevedores at ports from Houston to Boston.
Rates kept stable in general on the Australia and New Zealand service. The AADA started to control capacity at the end of December, which was tighter than previous years by removing 3800TEU weekly. In comparison, the alliance just reduced 3000TEU during the same period of last year.
Furthermore, the export rush ahead of Chinese New Year and the announcement of rate increase since mid-Jan., boosted volumes this week with the average slot utilization rate hit around 90% this week.
On Jan. 4, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Australia and New Zealand marked $890/TEU, almost unchanged from last week.
Demand dropped continuously on the Persian Gulf and Red Sea services, leaving the average slot utilization rate slipping to around 60%. Rates tumbled, and the achievement of rate restoration in early Dec. has been largely eroded.
On Jan. 4, the CCFI showed that the freight index of China/ Persian Gulf and Red Sea service quoted at 917.66 points, down by 4.4% from last week. It also represented a month-on-month decrease of 9.3%.
Considering the low level of rates, some lines are planning to restore rates since mid-Jan. by around $300/TEU.
On the Japan service, volume saw a slight drop this week, with the average slot utilization rate of ships from Shanghai to Japan ports staying below 60%. Rates slid marginally this week. On Jan 4, the CCFI showed that the freight index of this service quoted at 775.55 points, down by 0.2% from a week earlier.
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