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CCFI Commentary Issue 16, 2017

  Rates Performs Differently with Demand Stable

  China Export box transport market keeps stable. Transport demands in most services firmed, but freight rates have uneven performance. On April 14, Shanghai Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quotes 810.17points, almost in line with that one week ago.

  Data issued by ZEW shows that European economy is recovering, which boosts transport demand in the Europe route. Owing to the operation of three big alliances, demand/supply keeps on the balanced condition, and the average slot utilization rate remains above 90%, with spot rate rising slightly. On April 14, fright rates in the routes from Shanghai to Europe and Mediterranean routes (covering seaborne surcharges) quote USD866/TEU, a week-on-week increase of 3.6%. In the Mediterranean route, the average slot utilization rate leaving off Shanghai Port is around 90%, with spot rate growing. On April 14, fright rates in the routes from Shanghai to Europe and Mediterranean routes (covering seaborne surcharges) quote USD827 /TEU, up by 1.2 % from one week ago.

  U.S. employment rate has a slow growth, which impacts the recovery of resident’s consumption and transport demand. In the North America route, transport demand has no improvement. Demand/supply condition keeps balance as the stabilization of the whole capacity size. The average slot utilization rates in the USWC and USEC remain around 95%, with booking rate falling. On April 14, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1357/FEU and USD2460/FEU, up by 7% and 5% from one week ago respectively.

  In the Persian Gulf route, cargo volume keeps stable, and some box liners control the whole capacity size to maintain the demand/supply condition, where the average slot utilization rate is below 90%. In order to lock market share, most box liners choose to reduce freight rate, causing spot rate slip. On April 14, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD847/TEU, decreasing by 4.8% against one week ago.

  Cargo volume continues on the flat condition in the Australia route, where demand/supply condition faces depression and the average slot utilization rate hovers below 90%. On April 14, freight rate in the Shanghai-Australia route (covering seaborne surcharge) quotes USD430/TEU, down by 2.5% from one week ago.

  Transport demand sustains firm in the South America route, where part of box liners carry out capacity control measures to guarantee the stabilization of demand/supply condition, and the average slot utilization rate leaving off Shanghai Port rises to between 90%-95%. As a result, most box liners hike freight rate, leading booking rate growing largely. On April 14, freight rate in the Shanghai-South America route (covering seaborne surcharges) has a week-on-week growth of 13% to USD2540/TEU.

  Cargo volume slips in the Japan route, where sport rate keeps stable. On April 14, freight index in the China-Japan route quotes 661.93 points.

 
 
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