CCFI Commentary Issue 46, 2016

  Rate ups and downs but Index Stable

  As the nearly end of traditional peak season, China export box transport market saw the whole demand continued to slip, and demand/supply condition kept on the relatively stable level. Export for the Mediterranean route, freight rate in most routes tumbled. On Dec.9, Shanghai (Containerized) Freight Index (SCFI) issued by Shanghai Shipping Exchange quoted 797.62 points, almost in line with that one week ago.

  Data from Markit showed that PMI in Euro zone quoted 53.9 in November, a month-on-month increase of 0.6%, also the highest record in this year, which represented that the Euro zone economy was recovering and supported transport demand in the Europe route, where the average slot utilization rate surplus 90%, with some even 100%, and demand/supply condition kept stable. Owing that box liners persisted to carry out freight rate increase plan, spot rate kept rising. On Dec.9, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quoted 1046/TEU and USD944/TEU, jumping by 12.5% and 9.1% from one week ago respectively.

  The growing employment rate in the U.S. in November supported consumption demand. As the nearly end of traditional peak season, transport demand slipped slightly in the North America route. Both the average slot utilization rates in the USWC and USEC remained around 95%, where demand/supply condition kept firmed and spot rate declined continuously. On Dec.9, freight rates in the services from Shanghai to USWC and USEC (covering seaborne surcharges) quoted USD1382/FEU and USD2340/FEU, falling by 5.1% and 3.1% against one week ago respectively.

  The Persian Gulf route saw transport demand still weak, as part of box liners limit capacity size, demand/supply condition improved, and the average slot utilization rate mounted to around 90%. Spot rate continued to decline, but part of box liners planed to push up freight rate. On Dec.9, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quoted USD527/TEU, falling by 3.3% against the previous week.

  In the Australia/New Zealand route, transport demand began to decline as the end of traditional peak season. The tightened supply of spaces is retrieved, and the average slot utilization rate declined to 90%. Following the dip of demand, spot rate fell. On Dec.9, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne surcharges) quoted USD730/TEU, down by 8.2% against last week.

  Transport demand stopped rising in the South America route. Despite box liners control the whole capacity size, capacity still oversupplied, and the average slot utilization rate in this route declined to 80%. Owing to over expanding of capacity previously, freight rate was on the slip depression, and spot rate tumbled largely. On Dec.9, freight rate in the Shanghai-South America route (covering seaborne surcharges) had a week-on-week decrease of 16.9% to USD2058/TEU.

  Cargo volume decreased slightly in the Japan route, where spot rate kept stable. On Dec.9, freight index in the China-Japan route slipped by 0.2% from one week ago to 651.63 points.

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