CCFI Commentary Issue 43, 2016

  Rate Declined Continuously

  As the end of traditional peak season in the ocean-going routes, China export box transport market saw demand shrink and spot rate slip, which dragged down the comprehensive index. On Nov.18, Shanghai (Export) Containerized Freight Index (SCFI) that was issued by Shanghai Shipping Exchange quoted 814.01points, down by 1.3% from one week ago.

  Data issued by ZEW showed that market participants were optimistic on the economic outlook in Euro Zone. Nevertheless, as the end of traditional peak season, transport demand tumbled in the Mediterranean route, where the average slot utilization rates performed differently. Despite the small part of services full-loaded, the average slot utilization rates in most services slipped to below 90%. In order to attract cargo volume and to hike loading rate, box liners withdrew fright rate increase plan in mid November. On Nov.18, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quoted USD788/TEU and USD710/TEU, falling by 9.3%、2.5% comparing with one week ago respectively.

  As cargo volume was lack of energy to grow, transport demand at a turning point in the North America route, where the average slot utilization rate kept around 95%, almost in line with that one week ago. Despite of stable demand/supply condition, spot rate declined continuously. On Nov.18, freight rate in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quoted USD1687/FEU and USD2623/FEU, tumbling by 6.7% and 1.8% from one week ago respectively.

  In the Persian Gulf route, transport demand kept unchanged overall. Simultaneously, under the support of capacity limit measures, market supply of capacity shrank, and the average slot utilization rate stood above 90% firmly, with some even the improvement of market fundamental condition, most box liners implemented freight rate increase plan, leading spot rate rebounding largely. On Nov.18, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quoted USD648/TEU, surging by 46.9% against previous week.

  The Australia/New Zealand route saw transport demand was hot and the average slot utilization rate sustained at a higher level, with some even full-loaded. Owing to the nice performance of transport demand, most box liners remained their freight rate level, finally. On Nov.18, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne surcharges) quoted USD977/TEU, up by 0.4% from one week ago.

  In the South America route, cargo volume and demand/supply condition kept stable, and the average slot utilization rate remained about 95%. As spot rate rose, box liners carried out different market strategies, with some reducing freight rate. As a result, spot rate had a large slip. On Nov.18, freight rate in the Shanghai-South America route (covering seaborne surcharges) quoted USD2685/TEU, tumbling by 7.7% against one week ago.

  Cargo volume and spot rate kept stable in the Japan route. On Nov.18, freight index in the China-Japan route quoted 655.78 points, almost unchanged from one week ago.

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