CCFI Commentary Issue 41, 2016

  Demand/supply Stable but Rate Slip

  China export container transport market saw demand firmed, and demand/supply condition in most routes stable. Freight rates in some routes slipped slightly, with the comprehensive index declining. On Nov.4, Shanghai (Containerized) Freight Index (SCFI) issued by Shanghai Shipping Exchange quoted 860.48 points, down by 2.8% from one week ago.

  In the Europe route, the recovering economy in the main economies boosted transport demand. In the week ending Nov.4, the average slot utilization leaving off Shanghai Port kept above 90%, with some even full-loaded. Owing to the demand/supply condition unchanged, some box liners sustained freight rate, but some reduced it. On Nov.4, freight rate in the Shanghai-Europe route (covering seaborne surcharges) quoted USD913/TEU, falling by 4.7% against one week ago. In the Mediterranean route, since some box liners adjusted capacity layout, the whole supply of capacity shrank which improved the demand/supply condition and made the average freight rate decrease by USD50/TEU. On Nov.4, freight rate in the Shanghai-Mediterranean route (covering seaborne surcharges) quoted USD738/TEU, a week-on-week slip of 6.3%.

  Cargo volume remained on the relatively high level in the North America route, where the demand/supply condition performed well. The average slot utilization rate leaving off Shanghai Port approached above 95%, and more than one 100%. Despite the well performance of demand/supply condition, freight rate slipped depressively, which was caused by that freight rate kept rising since October and the stiffened competition among box liners after the bankrupt of Hanjin Shipping. On Nov.4, freight rates in the services from Shanghai to USWC and USEC (covering seaborne surcharges) quoted USD1990/FEU and USD2793/FEU, falling by 2.2% and 1.5% from one week ago respectively.

  In the Persian Gulf route, the increasing cargo volume was nearly invaded after the Chinese National Holiday, and the oversupply of capacity caused again. In order to attract cargo volume, most box liners reduce booking rate, leading freight rate tumbled fast. On Nov.4, fright rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quoted USD490/TEU, diving by 15.4% from one week ago.

  Transport demand kept on the relatively high level in the Australia route, where the demand/supply condition unchanged and the whole capacity supply firmed. Fright rate remained on the relatively high level, and made high record repeatedly. On Nov.4, freight rate in the Shanghai-Australia route (covering seaborne surcharges) quoted USD891/TEU, up by 1.5% from one week ago.

  In the South America route, cargo volume grew firmly, and the demand/supply condition kept on the nice level, which was beneficial from the stable capacity size. Although impacted by the different attitudes towards the post market, freight rate ups and downs, but finally remained on the relatively high level. On Nov.4, freight rate in the Shanghai-South America route (covering seaborne surcharges) quoted USD2673/TEU, down by 1.7% against one week ago.

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