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CCFI Commentary Issue 20, 2017

  Freight Rate Slip for the Excess Spaces

  China export box transport market sees transport demand stable overall. As new alliances complete to adjust services, capacity is relaxed and booking rate decreases in many services, with spot rate slip overall. On May 12, Shanghai Export Containerized Freight Index (SCFI) quotes 865.03 points, a decrease of 3.3% comparing with one week ago.

  Transport demand keeps stable in the Europe route, where the average slot utilization rate goes uneven, with some 100% and some only 80% around. After small part of box liners reduce freight rate to attract cargo volume, most of box liners follow to decrease freight rate, leading spot rate falling. On May 12, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quote USD961/TEU and USD949/TEU, falling by 3.5% and 3.9% from one week ago respectively.

  In the North America route, the slip of local residents’ consumption confidence drags down transport demand. Despite the average slot utilization rates in the USWC and USEC remaining above 90%, capacity supply still overwhelms transport demand. Box liners reduce booking rate to lock market share, with spot rate falling in general. On May 12, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1432/FEU and USD2432/FEU, falling by 7.9% and 5.3% from one week ago respectively.

  As it enters into Ramadan in the destination, despite part of cargo owners making shipment, the whole transport demand tends to decline in the Persian Gulf route, where the excess of capacity worsens. Most box liners stock cargo volume and reduce freight rate to sustain the average slot utilization rate, causing freight rate falling slightly. On May 12, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD716/TEU, falling by 3.8% against one week ago.   

  Transport demands is flat in the Australia route, where the average slot utilization rate leaving off Shanghai Port hovers around 80%. For the lack of sufficient cargo volume, spot rate declines. On May 12, freight rate in the Shanghai-Australia route (covering seaborne surcharges) has week-on-week slip of 2.8% to USD419/TEU.

  Cargo volume keeps stable in the South America route, where the average slot utilization rate remains above 90%, with some even 100%. Owing to the good trend of market, box liners push up freight rate, leading spot rate jumping On May 12, freight rate in the Shanghai-South America route (covering seaborne surcharges) quotes USD3284/TEU, up by 16.5% from one week ago.

  

 
 
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