|CCFI Commentary Issue 19, 2013|
|Weekly Report of China Export Container Transport Market
(CCFI Commentary in Issue 19, 2013)
Rate was depressed as demand in the doldrums
China export trades were going on the downside track this week. Volume before the May Day holiday was less than expectation and many lines had to suspend some voyages from mid to late holiday, but post-holiday volume stayed flat and rate was depressed further. On May 3, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), the representation of the whole market, marked at 1101.57 points, roughly in line with last week; while the Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, marked at 1026.85 points, down 2.1% from last week.
On the Europe service, rate continued falling for lack of volume. European debt crisis proceeded with data showing that the unemployment rate of 17 European countries in March recorded at 12.1%, reaching the new peak since 1995. Consumers’ weak demand was mirrored by recent quiet space booking. To hold the slot utilization rate, some carriers suspended voyages temporarily and cut rate for cargo. Consequently, the average slot utilization rate for Shanghai to Europe service stood at 90% plus this week, but rate decreased further despite of narrower range of drop. On May 3, the CCFI showed that the freight index of Europe service marked at 1338.72 points, down 0.5% from last week, contracting by 2.1%.
On the Mediterranean service, volume picked up due to Ramadan and carriers tightened capacity, as a result, the average slot utilization rate went up to 85% above. However, rate dropped a bit with market confidence still insufficient after months’ sliding down. On May 3, the CCFI showed that the freight index of Mediterranean service inched down by 0.8% from last week.
On the North America trade, it presented a soft trend wholly this week. Carriers began to deploy capacity for the upcoming peak season and supply was enlarged, which brought the vessel loading rate lingering at around 90% and rate going on its downside way. On May 3, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of USWC quoted at $2067/FEU, down 1.7% from last week. Whilst, the USEC service saw the poor performance of volume with the average vessel loading rate standing only at around 80%. It is reported that lines are planning to add capacity up to beyond 12% on Asia/ USEC trade in late May ahead, thus rate on this trade will face more pressure if enough volume failing to come during the coming peak season. On May 3, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of USEC quoted at $3213/FEU, down 1.2% from last week.
On the Persian Gulf service, this week it saw the average vessel utilization up to around 85% backed by improved volume ahead the Ramadan. However, insiders said that to seize market shares, many lines recently lowered their rates for more cargo before the festival, which led to the booking rate collapse. On May 3, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Persian Gulf tumbled by 7.7% from last week to $856/TEU.
On the Australia and New Zealand service, AADA’s strict management on capacity continued, seeing that the average slot utilization rate stood at 90% above and the booking rate kept solid. On May 3, the CCFI showed that the freight index of Australia and New Zealand service quoted at 1058.57 points, almost unchanged from last week.
On the Japan service, volume was stable this week. The average slot utilization rate of Shanghai ports stood at around 70% and rate stabilized with a slight rise. On May 3, the CCFI showed that the freight index of this service marked at 770.95 points.
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