CCFI Commentary Issue 03, 2017

  Cargo Volume Kept Stable but Rate Reduced

  China box transport demand kept stable in the week ending Jan.20. Spot rate reduced somehow as the end of peak season in some routes. On Jan.20, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 971.64 points, falling by 1.9% from one week ago.   

  As the recovering economy in Euro zone recently, the local consumption spurred, which boosted transport demand in the Europe route. In terms of capacity, some box liners added capacity supply since from early January, which invaded the favorable from increasing cargo volume. Some box liners reduced freight rate repeatedly for the sake of booking rate after the Spring Festival, leading spot rate tumbling in average. On Jan.20, freight rate in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quoted USD1052/TEU and USD1004/TEU, falling by 3.1%、2.3% from one week ago respectively.

  U.S. economy is on its stable recovery way, and the local consumption increased, which spurred transport demand growing firmly in the North America route. The market vacant caused by the bankruptcy of Hanjin Shipping had not be filled completely, plus the growing cargo volume, vessel spaces tended to be tight. The average slot utilization rate in the USWC route sustained above 95%, with some even full-loaded. Spot rate declined from last week, but still on the relatively higher level. On Jan.20, freight rate in the route from Shanghai to USWC route (covering seaborne surcharges) quoted USD 2167/FEU, having a week-on-week decrease of 2.0%. Space supply tended to be tighter in the USEC route, where the loading rate was nearly 100%, and spot rate went north. On Jan.20, freight rate in the route from Shanghai to USEC route (covering seaborne surcharges) increased by 1.5% against one week ago to be USD3647/FEU.

  The peak season before the Spring Festival was evading, transport demand growth space slowed in the Persian Gulf route, where the average slot utilization rate hovered between 90%-95%. Some box liners started to reduce freight rate for the sake of cargo volume after the Spring Festival, causing the average booking rate relaxing. On Jan.20, the freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quoted USD634/TEU, down by 0.5% against one week ago.

  In the Australia route, transport demand was not as hot as expected, plus capacity had no remarkable shrink, the average slot utilization rate kept around 90%. Most box liners decide to reduce freight rate to sustain cargo volume, leading spot rate went south further. On Jan.20, freight rate in the Shanghai-Australia route (covering seaborne surcharges) quoted USD772/TEU, a week-on-week decrease of 7.1%.

  In the South America route, the oversupplied supply/demand condition is worsened, and the average slot utilization rate slipped to around 90%. Owing to the large increase of freight rate, spot rate continued to decline. On Jan.20, freight rate in the Shanghai-South America route (covering seaborne surcharges) quoted USD2294/TEU, falling by 10.9% against one week ago.

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