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| CCFI Commentary Issue 11, 2013 |
| Weekly Report of China Export Container Transport Market (CCFI Commentary in Issue 11, 2013) Weak market continued to put pressure on rates The downward trend of China export box market persisted this week. Except the Australia and New Zealand trade, where the booking rates went up due to the mid-March rate increase, rates plunged on all other routes to different extent amid an sheer unbalanced supply/demand condition. On Mar.08, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), the representation of the whole market, stood at 1110.77 points, down 2.1% from last week. Meanwhile, the Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, stood at 1072.81 points, down 4.0% from a week ago. On the Europe trade, demand recovered slowly after the Lunar New Year, where the average slot utilization rate of ships out of Shanghai stayed at around 70%. Low utilization rate drove spot rates to go down further. On Mar.08, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of North Europe and Mediterranean dropped 9.5% and 7.1% from last week to $999/TEU and $960/TEU respectively. The North Europe service saw the deepest decline among all trades this week, followed by the Mediterranean counterpart. Since the rate increase at the start of this year, weekly rates of these two services have been falling for almost two months, lost 23.2% and 23.7% from the same period of last month respectively. Although carriers have announced the rate increase plan, effective from Mar. 15, individual carriers could push for different timetable and adjustment range due to the low utilization rate, thus a weaker-than-expected result is likely. On the North America trade, the average slot utilization rate of ships out of Shanghai remained almost unchanged this week, at around 70%～75%. However, it is lower compared to the corresponding periods in history. Carriers continued their rate cut to attract cargos. On Mar. 08, the CCFI showed that the freight indexes of USWC and USEC services marked at 1069.77 points and 1233.45 points, respectively down 2.7% and 2.9% week on week, in a faster speed than a week ago. Rates plunged following the increase at the beginning of 2013 due to the substantial overcapacity on the Persian Gulf service. In some cases, carriers quoted prices under $500/TEU. On Mar. 08, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Mid-East region plunged 3.7% from last week to $575/TEU. That compared to a decline of 11.2% last week. On the service from Shanghai to Australia and New Zealand, the average slot utilization rate sustained around 90% this week. As carriers did well on capacity control and have started to impose the mid-March rate increase, this service became the only route that saw rate increase among all deep sea trades this week. However, shortage of fresh shipments gave little support to hold up the previous $300/TEU rate restoration. It is said that the real increase averaged at around $50/TEU. On Mar. 08, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Australia and New Zealand surged 3.4% from last week to $971/TEU. The South America trade moved towards a more obvious two-tier market further this week. Carriers told the average slot utilization rate of ships to ECSA deteriorated this week, but kept stable on the WCSA service. On Mar.08, the CCFI showed that the freight index of China/South America service stood at 1040.76 points, almost unchanged from last week. On the Japan service, the average slot utilization rate of ships out of Shanghai remained above 70%, and rates kept stable this week. On Mar.08, the CCFI showed that the freight index of Japan service quoted at 757.44 points, almost unchanged from last week. |
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