CCFI Commentary Issue 44, 2016

  Both Demand and Rate Slipped

  China export box transport market saw demand and spot rate declined. On Nov.25, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 782.10 points, down by 3.9% from one week ago.

  Data from Markit showed European economy on the stable develop trend, which spurred transport demand hot in the Europe route. But as the end of traditional peak season, the whole demand declined, and the average slot utilization rate tumbled to around 95%, with spot rate slip. On Nov.25, freight rate in the Shanghai to Europe route (covering seaborne surcharges) quoted USD775/TEU, tumbling by 1.6% from one week ago. In the Mediterranean route, owing to box liners controlled the whole capacity size, demand/supply condition improved, and the average slot utilization rate remained around 90%, leading spot rate firming. On Nov.25, freight rate in the Shanghai-Mediterranean route (covering seaborne surcharges) had a week-on-week growth of 2.1% to USD725/TEU.

  Despite U.S. economy performed strong, transport demand in the North America route declined. The short supply of space was retrieved, demand/supply condition kept stable in general, and the average slot utilization rate was around 95%. Spot rate continued to tumble. On Nov.25, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quoted USD1528/FEU and USD2513/FEU, tumbling by 9.4%、4.2% against one week ago respectively.

  Transport demand kept stable in the Persian Gulf route, where some box liners carried out capacity limit measures to sustain the stable of condition/supply condition, and the average slot utilization was around 80%, with spot rate firmed. On Nov.25, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quoted USD641/TEU, down by 1.1% from the previous week.

  Transport demand kept hot in the Australia/New Zealand route, where demand/supply condition had a nice performance. The average slot utilization rate in this route kept between 90%-95%. Spot rate declined from one week ago. On Nov.25, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne charges) quoted USD924/TEU, down by 5.4% from one week ago.

  In the South America route, transport demand fell but the whole capacity kept unchanged, which reversed the demand/supply condition, leading the average slot utilization rate tumbling to around 85%. Box liners chose to reduce freight rate for the sake of market share, and spot rate declined continuously. On Nov.25, freight rate in the Shanghai-South America route (covering seaborne surcharges) quoted USD2400/TEU, having a week-on-week slip of 10.6%.

  Cargo volume rose slightly in the Japan route, where spot rate kept stable. On Nov.25, freight index in the China-Japan route quotes 655.65 points, almost in line with that one week ago.

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