CCFI Commentary Issue 36, 2016

  Capacity Increased but Rate Slip

  In the week ending Sep.23, China export box transport market saw demand stable. On Sep.23, China (Export) Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE) quoted 736.07 points, up by 3.4% against one week ago. In the spot market, after some box liners added capacity, the short of capacity supply had improved somehow, with freight rate in many services falling. On Sep.23, Shanghai Containerized Freight Index (SCFI) issued by SSE fell by 7.6% from last week to 733.56 points.

  In the Mediterranean route, cargo volume had year-on-year slip during the peak season, but not full-loaded. The average slot utilization rates in the Europe and Mediterranean routes were around 90% and 80%. Spot rate had a large increase previously, and began to slip this week. On Sep.23, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quoted USD764/TEU and USD667/FEU, tumbling by 20.9% and 22.4% against one week ago respectively.

  In the North America route, transport demand was hot during the peak season, with some even full-loaded, and the average slot utilization rate kept around 95%. After Hanjin Shipping ceasing operation, some box liners add capacity in this route, and the demand/supply condition began to be stable. Spot rate decreased slightly. On Sep.23, freight rate in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quoted USD1726/FEU and USD2433/FEU, down by 0.9% and 0.6% from one week ago respectively.

  In the Persian Gulf route, transport demand was weak to increase. Some box liners kept carrying out capacity shrink measures, but the whole demand/supply condition was fail to improve, leading the average slot utilization rate around 75%. For the lack of sufficient cargo volume, spot rate kept falling. On Sep.23, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quoted USD374/TEU, a week-on-week decrease of 6.7%.

  As the end of mid-Autumn Festival, cargo owners recovered shipment space, as a result, transport demand kept increasing in the Australia route. Owing to some box liners continued to carry out capacity limit measures, demand/supply condition improved, and the average slot utilization rate was above 90%, with some even excess 95%. Spot rate increased marginally. On Sep.23, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne surcharges) quoted USD523/TEU, up by 0.8% comparing with one week ago.

  As the end of Olympic Games, transport demand in the South America route declined repeatedly, causing the oversupply of capacity worsened. For the lack of support of market, spot rate slipped week by week, and even the lowest around USD1000/TEU. On Sep.23, freight rate in the Shanghai-South America route (covering seaborne surcharges) quoted USD1613/TEU, a week-on-week decrease of 25.3%, or a slip of 43.8% from early this month.

  Cargo volume decreased slightly in the Japan route, where spot rate kept stable. On Sep.23, freight index in the China-Japan route quoted 637.95 points, down by 1.4% from one week ago.

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