CCFI Commentary Issue 20, 2013
  Date:2013-05-17
Weekly Report of China Export Container Transport Market
(CCFI Commentary in Issue 20, 2013)

Rates Fall on Most Trades due to Weak Demand

China export box market continued to fall this week. Rates kept going south on most routes with no sign of surge in shipments after holiday. On May 10, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), the representation of the whole market, marked at 1082.82 points, down 1.7% from last week. The Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, saw a similar drop, standing at 1009.48 points when the week ends.

On European service, carriers’ limitation on capacity supply just put off rate decline as it is still short of volumes. The average slot utilization rate for service from Shanghai to base ports in Europe slid to around 85%, accelerating the rate decline. On May 10, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Europe significantly fell 8.2% from last week to $731/TEU.

Supported by export rush before the Ramadan holiday, the Mediterranean service performed better than its European counterpart. However, most carriers think the prospect of this market is bleak. This week, the average slot utilization rate for Shanghai/ Mediterranean service stood at about 90%. Rate tumbled slightly. On May 10, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Europe marked $805/TEU, a decrease of 4.3% week on week.

On North America trade, market remained stable this week. As the traditional peak season approaches, some carriers were positive about the market in short term and were mulling to levy GRI by the end of this month. The average slot utilization rate for Shanghai/USWC service stood at around 85% this week. On May 10, the CCFI showed that the freight index of China/USWC service marked at 1104.74 points, almost unchanged from last week.

On USEC service, the recovery of volume was unsatisfactory, putting the average slot utilization rate of ships leaving Shanghai at around 85%. On May 10, the CCFI showed that the freight index of China/USEC service marked at 1218.36 points, almost unchanged from last week.

Rates fluctuated fiercely on Persian Gulf service as shipping lines competed fiercely and other factors influenced. The average slot utilization rate stood at around 90%. Some carriers planned to push for another GRI by mid-May. On May 10, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Persian Gulf surged 11% from last week to $950/TEU.

The average slot utilization rate for Australia and New Zealand trade kept above 90% for some time, which was largely contributed to strict capacity management by carriers, rather than strong demand. Rates continued to dive due to weak demand. On May 10, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Australia and New Zealand fell 6.3% from last week to $959/TEU.

Japan service saw a drop in volume this week, where the average slot utilization rate stayed around 60%, however, rates sustained stable. On May 10, the CCFI showed that the freight index of this service marked at 752.67 points.  
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