CCFI Commentary Issue 14, 2017

  Demand and Rate Increase

  As part cargo owners do shipment ahead in order to avoid freight rate growth, China export box transport market sees transport demand rise, and box liners hike freight rate in many ocean-going routes in time. However, new container alliances are adjusting services, and many routes represent uneven performance, with the comprehensive index growing in general. On March 31, Shanghai Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quotes 830.02 points, rising by 9.4% against one week ago.

  EU zone economic sentiment issued by EU Commission quotes 107.9, and industry sentiment and service sentiment slip, which shows that economy recovery face impediment. Simultaneously, routes and flights are adjusting, which makes influence on the cargo owners’ choice. In order to lock market share, box liners are cautious on the freight rate increase, only part of them trying to hike it marginally, and most of them keep stand-by attitude, leading spot rate having a slim growth. On March 31, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quote USD838/TEU and USD837/TEU, rising by 2.8% and 4.9% against one week ago.

  In March, U.S. consumer confidence index quoted 125.6, having a large increase, which shows that consumers are positive on the economy outlook, and transport demand recovers steadily. The average slot utilization rate in this route sustains above 90%, with some even 100%. As market goes better, most box liners carry out freight rate increase plan in time, and spot rate has a large increase. On March 31, freight rates in the routes from Shanghai to USWC (covering seaborne surcharges) quote USD1479/FEU, a large increase of 2.3% from one week ago. In the USEC route, impacted by the expansion of capacity, competition is stiffened, and most box liners decide to sustain freight rate on the present level, even lower, causing spot rate slip. On March 31, freight rates in the routes from Shanghai to USEC (covering seaborne surcharges) quote USD2565/FEU, falling by 2.3% from last week.

  As the approach of Ramadan in the destination, cargo owners accelerate shipment space, and transport demand rises steadily in the Persian Gulf route. Simultaneously, box liners shrink capacity, making the whole demand/supply condition remaining on the nice level. Encouraged by the ground condition of market, most box liners rehike booking rate, with spot rate growing continuously. On March 31, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD906/TEU, surging by31.3% against one week ago.

  For the insufficient cargo volume, demand/supply condition fails to improve in the Australia route, where the average slot utilization rate keeps around 80%. Owing to lack of confidence on the post market, most box liners cease to increase freight rate plan contemporarily, leading spot rate too weak to grow. On March 31, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne surcharges) quotes USD434/TEU, keeping in line with that one week ago.


©2001-2013 Shanghai Shipping Exchange All Rights Reserved. Copyright Declaration Contact us
Shanghai ICP B2-20050110