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| CCFI Commentary Issue 05, 2013 |
| Weekly Report of China Export Container Transport Market (CCFI Commentary in Issue 05, 2013) Pre-holiday shipments spur rates to raise fluctuant Despite ups and downs during this week, generally, boxes rates out of China rose at the end of this week. Spurred by the first rate restoration plan at the beginning of 2013, rates on most services recovered. However, on some routes, rates released easing signs this week after improvement in previous weeks with the weak demand and acute overcapacity. On Jan.18, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE) quoted at 1125.21 points, almost the same as last week; while the Shanghai Containerized Freight Index (SCFI) reported at 1245.84 points, an increase of 1.1% week-on-week. On the Europe service, carriers continued to carry out the strategy that cutting capacity to secure rates since last year, which means more ships were idled, plus shipments surged ahead of the Lunar New Year, the average slot utilization rate of this service remained over 90%, with some full-loaded this week. To lure the Lunar New Year cargo sources, line players pushed for the low price plan, which caused rates to go down this week after strong gains in last week. On Jan.18, the CCFI showed that the freight rate of China/Europe service remarked at 1468.42 points, almost unchanged from last week; while the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of North Europe quoted at $1349/TEU, down by 4.5% from a week ago. The Mediterranean market told a similar story. The number of boxes heading for East Med. outpaced those heading for West Med. In some cases, ships heading for East Med. were even full-loaded. On Jan.18, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Mediterranean quoted at $1311/FEU, down 3.3% over a week. More than one carrier reasoned that carriers collectively increased rate on this trade recently aiming to gain more leverages when they negotiate the annual service contract with shippers in 2013. Nevertheless, the strategy that carriers cut rates made a negative impact on the spot rates recently. Considering this, some carriers have made the announcement that they would impose the Peak Season Surcharge by the end of this month, an effort to retain the rate level before the Lunar New Year. On the North America market, volumes kept stable on both USWC service and USEC service, where the average slot utilization rate reached 90% and some individual were full-loaded. Generally, rates continued to rise this week as carriers who didn’t increase rates last week followed their peers to hike rates this week. However, in terms of some individual route, signs of rate adjustment have emerged, with the booking rates of carriers that led the recent rate increase easing back this week. On Jan.18, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of USWC and USEC quoted at $2520/FEU and $3670/FEU, respectively up 7.6% and 4.1% from a week ago. Since trade between Shanghai and U.S. have a brighter picture than Europe, rates will increase this year more strongly and keep in a longer time on the North America trade this year. The capacity management taken by Asia Australia Discussion Agreement (AADA) and exports rush before holiday gave a momentum to the Australia and New Zealand service, where the average slot utilization rate rose to over 90%. Rates stabilized after improved from last week. On Jan.18, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Australia and New Zealand soared 5.3% to $1015/TEU. Market participants said that there was no evident pre-holiday shipment rush on the South America service. The average slot utilization rate for ships from Shanghai to West Coast of South America slipped to below 85%. Rates eroded this week after a weak gain last week. On Jan.18, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of South America declined 3.4% to $2130/TEU. With the end of New Year holiday in Japan, volumes on the service from Shanghai to Japan jumped and the average slot utilization rate stayed above 70% with rates keeping stable. On Jan.18, the CCFI showed that the freight index of Japan service quoted at 758.24 points, barely changed from last week. |
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