CCFI Commentary Issue 18, 2017

  Shipment rush boosts demand with rate growing

  China export containerized box transport welcomes a small shipment, with capacity in some routes even short-supplied. Box liners in most routes push up freight rate, leading spot rate growing largely. On April 28, Shanghai Export Containerized Freight Index (SCFI) quotes 909.25 points, having a large increase of 12.6% comparing with one week ago.

  In the Europe route, as economy goes better, transport demand rises further. Simultaneously, impacted by the shipment rush before the International Labor Day, capacity is short-supplied. The average slot utilization rate is around 95%, with most 100%. According to this condition, most box liners hike booking rate, leading spot rate rising largely. On April 28, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quote USD1021/TEU and USD1011/TEU, rising by 16.0% and 20.2% from one week ago respectively.

  U.S. economy keeps increasing but at a slower speed, which boosts transport market in the North America route. In terms of capacity, the large scale of vessels dampens demand/supply condition from improving, despite of the increase of cargo volume. The average slot utilization rates in the USWC and USEC routes remain between 90%-95%. With the react to the shipment rush before holiday, most box liners carry out freight rate increase plan as scheduled, but not as much as plan. On April 28, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1606/FEU and USD2625/FEU, surging by 21.1% and 13.8% from one week ago respectively.

  As the coming of Ramadan, cargo volume begins to slip in the Persian Gulf route. Some box liners carry out capacity control measures, but fail to improve the ground condition. The average slot utilization rate is around 90%. In order to attract cargo volume, some box liners reduce booking rate slightly, with spot rate falling. On April 28, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD822/TEU, down by 0.8% against one week ago.

  Transport demand keeps flat in the Australia/New Zealand route. However, as the approach of shipment rush before International Labor Holiday, box liners have different strategies, with spot rate increasing. On April 28, freight rate in the Shanghai-Australia route (covering seaborne surcharges) has week-on-week growth of 5.2% to USD446/TEU.

  For the shipment concentration, transport demand increases fast in the South America route, where the average slot utilization rate remains above 90%, with some even full-loaded. Box liners hike freight rate again, with spot rate growing largely. On April 28, freight rate in the Shanghai-South America route (covering seaborne surcharges) quotes USD2927/TEU, increasing by 19.6% from one week ago, for the 6 consecutive weeks within 10 weeks.

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