|CCFI Commentary Issue 15, 2013|
|Weekly Report of China Export Container Transport Market
(CCFI Commentary in Issue 15, 2013)
Growing volumes stabilized composite index
Despite growing demand on the China export box market this week, supply/demand condition didn’t improve due to the expanding capacity. The market sustained stable in overall. On Apr. 3, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), the representation of the whole market, marked at 1111.86 points while the Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, marked at 1141.22 points, both almost unchanged from last week.
With the growing number of factories in China reopen after the lunar New Year, recent volumes on the Europe trade increased steadily. However, under the pressure of continuous new deliveries, some carriers added supply by replacing larger units with smaller ones, putting the average slot utilization rate at around 75%. Affected by the striking oversupply of capacity, rates have been falling since the end of last month. In some cases, rates are less than $1000/TEU. On Apr. 3, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Europe fell 6.1% from last week to $1070/TEU.
Rebound of liftings on the Mediterranean service was less dramatic, so was the expansion of capacity that is slower than European counterpart. The overcapacity was eased somewhat, with the average slot utilization rate rising back to around 80%. Nevertheless, carries cut rates to compete for more market shares, leading rates of west-Med boxes fell below $1100/TEU and about $900/TEU for east-Med boxes. On Apr. 3, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Mediterranean tumbled 4.9% from last week to $1073/TEU.
U.S. sees growing signs of recovery in economy recently, where employment rate and consumer confidence are rising, driving the demand for imports and transportation on the North America trade. However, capacity supply on the USWC service grew at a relatively fast pace, which to some extent upset the positive effect generated by rising volumes. The average slot utilization rate stood at 75%-80% this week. The supply/demand condition improved on the USEC service as capacity expanded slower, where the average slot utilization rate rose to about 85%.
Rates diverged among carriers this week. Most carriers that hadn’t increased rate last week hiked it this week while some reduced it after the increase last week. In general, the North America market continued a positive trend. On Apr. 3, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of USWC and USEC quoted at $2302/FEU and $3454/FEU respectively, up 1.7% and 1.3% from last week.
The scale of effective capacity on the Australia and New Zealand trade kept stable this week as demand rose steadily and most carriers persisted in controlling capacity strictly. However, some carriers shifted larger units to this route to relieve the pressure brought by the growth of capacity on main trades, leading to some easing of rates on certain voyages and fall of average slot utilization rate, at around 90%. On Apr.3, the CCFI showed that the freight index of Australia and New Zealand service marked at 1047.32 points, almost unchanged from last week.
Liftings rose slightly on the Persian Gulf service this week, but it was much inadequate compared to the bloated capacity. Carriers gradually reduced rates to keep liftings stable, leading to a slight drop of average rates. On Apr. 3, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Persian Gulf went down by 2.8% from last week to $877/TEU.
Japan service saw a slight increase in liftings this week. Average slot utilization rate of ships leaving Shanghai ports for Japan rose to 75% above and rates firmed up. On Apr.3, the CCFI showed that the freight index of this service quoted at 750.30 points, almost unchanged from last week.
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