CCFI Commentary Issue 26, 2015

  Demand unimproved with rate Bottom up

  In the week ending June 26, China export box transport market sees transport demand stable, but the oversupply of capacity still have no improvement. On June 20, China (Export) Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE) quotes 811.09 points, down by 1.8% from one week ago. However, impacted by box liners striving to raise freight rate, booking rate in some services goes north. On June 26, Shanghai (Export) Containerized Freight Index (SCFI) issued by SSE quotes 640.64 points, surging by 15.1% from last week.

  In the Europe service, despite the shipment peak season is coming, cargo volume has no increase, plus the gradual delivery of mega vessels, leads that the oversupply of capacity worsens. Under this circumstance, some box liners announce to limit capacity in a large scale in the third quarter. Some box liners carry out freight rate increase plan, with some even approach USD200 per TEU; while another part of box liners hold cautious attitude, and some spot rate declines, with the lowest around USD200 per TEU. In overall, the average spot rate rebounds this week. On June 26, freight rates in the services from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quotes USD 548/TEU and USD675/TEU, surging by 167.3% and 146.4% from one week ago respectively.

  In the North America service, transport demand keeps growing firmly, but as the increasing capacity, the oversupply of capacity has not changed. The average slot utilization rate in the USWC service stays between 85%-90%, and that in the USEC service keeps at above 90%. Owing to the weak market, fright rate slips comparing with that in the Europe service, and some box liners try to reduce freight rate for the sake of market share, only small number of them choosing to increase freight rate. On June 26, freight indices in the China-USWC and USEC services fall by 0.6% and 1.8% from one week ago to 885.22 points and 1184.35 points respectively. It is said that, as the approach of traditional peak season, part of box liners intend to hike freight rates again in mid July and mid August.

  In the Australia/New Zealand service, cargo volume keeps weak during the slack season, and most box liners carries out a new round of capacity limit plan. Space supply shrinks by 20%, only small part of box liners trying to hike spot rate. On June 26, freight rate in the Shanghai-Australia/New Zealand service (covering seaborne surcharges) quotes USD288 per TEU, up by 1.8% against last week.

  As the gradual approach of Ramadan in the Persian Gulf service, cargo volume increases slightly, and the average slot utilization rate hovers between 85%-90%, with spot rate rebounding. On June 26, freight rate in the Shanghai-Persian Gulf service (covering seaborne surcharges) quotes USD491 per TEU, up by 2.7% from one week ago.

  Cargo volume rises firmly in the Japan service, where the average slot utilization rate keeps around 60%, with spot rate stable. On June 26, freight index in the China-Japan service quotes 620.08 points.

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