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| CCFI Commentary Issue 07, 2013 |
| Weekly Report of China Export Container Transport Market (CCFI Commentary in Issue 07, 2013) Indices go up steadily ahead of the Lunar New Year China export box market experienced a relatively strong export rush in the last week before the Chinese New Year. Rates rose firmly within the week, supported by more volumes and less capacities. In general, most major routes have a good start in 2013. On Feb.01, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), representation of the whole market, stood at 1142.40 points and the Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, stood at 1219.39 points. Both barely changed from a week earlier, but rose 2.9% and 6.2% respectively compared to the same period of last month. On the Europe service, volumes picked up recently and lines continued to reduce capacities, a move extended from late 2012. As a result, lines almost achieved the goal of rate increase at the beginning of this year. The average slot utilization rate of ships out of Shanghai port heading for base ports in Europe remained above 90% this week, even 100% in some routes. On Feb.01, the CCFI showed that the freight index of China/ Europe service quoted at 1508.38 points, an increase of 4.0% month-on-month. To secure the utilization rate during the Lunar New Year, many major lines withdrew the planned rate restoration at the end of Jan, while some lowered the spot rates this week. On Feb.01, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of North Europe slightly dropped by 0.8% to $1316/TEU from a week earlier. It is said some lines announced to seek for a $750/TEU rate hike since mid-March. Given the fact that the current rates are 500/TEU higher than the same period of last year and no recovery sign on the Asia/Europe trade, the effect of rate increase will largely depends on lines’ determination and extent of capacity control. On the North America service, demand kept flat within these 7 days. The average slot utilization rate remained around 95%, with some ships leaving in full-loaded. The spot rates sustained stable in overall. However, lines are cautious about market condition during the Lunar New Year holiday and afterwards, some of them have cut rates to lure more cargos and cancelled some services amid and post the Chinese holiday. On Feb.01, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of USWC and USEC quoted at $2475/FEU and $3630/FEU, while the CCFI showed that the freight index of USWC service and USEC service remarked at 1114.72 points and 1273.74 points respectively, almost even as last week. According to at least one foreign media, International Longshoremen's Association and United States Maritime Alliance will restart the negotiation on the last day of Jan. If the two parties can’t make an agreement by Feb.06, the expiry date of their prior contract, 15 ports on the east coast of U.S. could stop operation. Recently, some lines have urged customers to take boxes and return empty boxes quickly and have launched a series of contingency measures. On the Persian Gulf and Red Sea services, the pre-holiday shipment rush facilitates the average slot utilization rate up above 95%, even 100% in some cases with rates stable. On Feb.01, the CCFI showed that the freight index of China/ Persian Gulf and Red Sea services reported at 887.54 points, almost unchanged from last week. Volumes raised steadily before the Chinese New Year on the Australia and New Zealand services, where the average slot utilization rate reached above 95%, even some individual routes seeing 100%. On Feb.01, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Australia and New Zealand marked $995/TEU, almost unchanged from last week. The Japan service saw a mild increase in volume this week, where the average slot utilization rate of ships from Shanghai to Japan ports stand just beyond 75% and rates marginally went up. On Feb.01, the CCFI showed that the freight index of this service quoted at 768.28 points, up 2.2% from a week earlier. |
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