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| CCFI Commentary Issue 14, 2013 |
| Weekly Report of China Export Container Transport Market (CCFI Commentary in Issue 14, 2013) Weak Demand Made Index corrected China box export market experienced a weak week. Except the U.S. trade, where forward booking rates hiked due to the rate increase by carriers, most routes saw rates continued to plunge. On Mar.29, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), the representation of the whole market, marked at 1108.25 points, while the Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, quoted at 1151.47 points, both almost unchanged from last week. The average slot utilization rate of the Europe and Mediterranean trades remained above 70% this week. Without adequate volumes, carriers cut prices to attract cargoes, rather than strive to hold up rates, eroding almost all achievement gained from previous rate increases. On Mar.29, the CCFI showed that the freight index of Europe and Mediterranean service tumbled 2.0% and 2.5% from last month to 1444.03 points and 1410.07 points. Carriers are planning to push for another rate increase by mid-April, however, the prospect of the increase are uncertain if capacity can’t be well managed. On the North America trade, the average slot utilization rate of ships out of departure ports along the coast of China varied. The average slot utilization was above 70% generally, and some reached around 90%. The rise of volume this week could be boosted by the announcement of rate increase since April 1st, as some shippers shipped their goods earlier to save cost. Furthermore, the turnaround of market gave carriers confidence on the rate increase, which had been reflected by the rising forward booking rates this week. On Mar.29, the SCFI showed that the freight rate (covering seaborne surcharges) of services from Shanghai to base ports of USWC and USEC marked $2264/FEU and $3411/FEU, respectively up 7.6% and 5.1% from last week. The average slot utilization rate of the Persian Gulf service stood at beyond 70%, but appeared different among different services. Carriers had to use price-cutting strategy to collect more cargoes. The downward trend of forward booking rates continued as last week. On Mar.29, the CCFI showed that the freight index of Persian Gulf and Red Sea service lost 2.2% from last week to 956.16 points. The supply/demand condition of the Australia and New Zealand market performed better than most other trades, which are contributed to the effective capacity management by members of Asia Australia Discussion Agreement. By removing about 20% capacity this week, the average slot utilization rate of this service hit 90% above, and some voyages can reach 100%. However, carriers’ confidences haven’t fully resumed, which explains why they didn’t announce any rate increase plan. The forward booking rates moved flat this week. On Mar.29, the CCFI showed that the freight index of Australia and New Zealand service quoted at 1042.41 points, almost unchanged from last week. On the South America trade, demand appeared differently between the east and west coast. The average slot utilization rate of ships heading to the east coast of South America recorded above 80% and the decline of rate stopped. In contrast, it was just about 70% for ships heading to the other side of this continent, which forced carriers to cut rates for luring cargoes. On Mar.29, the SCFI showed that the freight rate (covering seaborne surcharges) of services from Shanghai to base ports of ECSA (Santos) marked $1688/TEU, down 1.5% from last week. This compared to a decline of 5.6% last week. While the CCFI showed that the freight index of South America service remarked 962.08 points, tumbled 3.5% week on week. On the Japan service, volumes kept almost in line with the level of last week. The average slot utilization rate of ships leaving Shanghai ports was just over 70% and rates fluctuated within a narrow range. On Mar. 29, the CCFI showed that the freight index of Japan service quoted at 726.48 points, a week-on-week decrease of 3.5%. |
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