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| CCFI Commentary Issue 09, 2013 |
| Weekly Report of China Export Container Transport Market (CCFI Commentary in Issue 09, 2013) Rates declines as market turns quiet after holiday China export box market was quiet this week. As it takes time for factories to return to operation and almost all boxes have been shipped ahead of the holiday, volumes out of China shrank significantly this week, leading rates going down on most trades, despite varied in range from individual route. On Feb.22, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), the representation of the whole market, stood at 1152.47 points, almost unchanged from the previous publication released on Feb.8. Meanwhile, the Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, stood at 1165.35 points, down 3.6% from a week ago. As production and transportation in China haven’t fully resumed, volumes out of China on the Europe service still remained weak this week. Carriers carried out temporary service suspension to reduce capacity. The average slot utilization rate of some carriers was under 50% this week and rates went down significantly compared to that before the holiday. On Feb.22, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of North Europe dropped 7.8% from the previous publication to $1199/TEU. Similarly, the forward booking was not as strong as expectation on the North America service. The average slot utilization rate of services from Shanghai to USWC and USEC still maintained around 85%. The figure for services out of ports in South China recorded better, at 90%. Rates slightly reduced amid a general shortage of demand. On Feb.22, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of USWC and USEC marked $2364/FEU and $3517/FEU, respectively down 3.3% and 2.5% from the previous publication. However, the USWC and USEC components of the CCFI rose 20.2% and 13.2% compared to the same period of last year, indicating that rate level is stronger during the traditional slack season than last year. Carriers slashed up to 50% capacity on the Persian Gulf service due to weak booking rate. Nevertheless, the load factors for individual line still stayed less than 50% and rates were depressed. Experts estimate the condition will not be reversed in next two weeks. On Feb.22, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Mid-East region plunged 6.4% from the previous publication to $672/TEU. The Australia and New Zealand service was featured by low capacity base and obvious seasonality, compared with major east-west trades. Hence, carriers are able to manage the capacity more precisely. Members of Asia Australia Discussion Agreement cut over 60% capacity on this trade this week, followed by lines out of the alliance. Due to the massive cut, the average slot utilization rate of ships leaving Shanghai on this trade rose to 95% above and boxes were rolled in some cases. Despite good utilization level, some carriers are cautiously optimistic on the prospect, with rates going down this week. On Feb.22, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Australia and New Zealand tumbled 2.6% from the previous publication to $959/TEU. Japan service saw a massive reduction in volume this week, where ships leaving Shanghai can only load around 30% boxes in average. Rates kept stable when the freight index of Japan service released on Feb.22 stood at 758.28 points, almost unchanged from the previous publication. |
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