CCFI Commentary Issue 21, 2017


  Market Keeps Flat with Rate Slip

  China export box transport market sees the whole demand is flat. New alliances nearly completes to adjust services, in order to attract cargo volume and increase the space rating, most box liners continue to decrease freight rate, causing market keeping slip. On May 19, Shanghai Export Containerized Freight Index (SCFI) quotes 830.80 points, a decrease of 4.0% comparing with one week ago.

  Demand/supply condition has no remarkable improvement in the Europe route, where the average slot utilization rate leaving off Shanghai Port hovers around 90%. Some box liners who decreased freight rate two weeks ahead continues to reduce it, leading spot rate declining. On May 19, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quote USD924/TEU and USD914/TEU, falling by 3.9% and 3.7% from one week ago respectively.

  In the North America route, as local consumers are lack of confidence, transport market is too weak to grow. Simultaneously, capacity supply has a large shrink, which dampens demand/supply condition from improvement. Both the average slot utilization rates in the USWC and USEC are around 90%. Most box liners reduce freight rate actively with the aim to canvass, leading spot rate continues to tumble. On May 19, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1310/FEU and USD2298/FEU, falling by 8.5% and 5.5% from one week ago respectively.

  As the approach of Ramadan in destination, part of cargo owners rush to shipment, which causes transport a large growth in the Persian Gulf route, where the average slot utilization rate is above 95%. Some box liners hike freight rate, leading spot rate increasing. On May 19, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD719/TEU, up by 0.4%, a marginal increase from one week ago.   

  Demand/supply condition in the Australia/New Zealand route has no improvement for the insufficient cargo volume. The average slot utilization rate hovers around 85%, with spot rate keeping slip. On May 15, freight rate in the Shanghai-Australia route (covering seaborne surcharges) has week-on-week slip of 3.1% to USD406/TEU.

  As cargo volume is insufficient, the transport market fails to keep recovering in the South America route, where spot rate decreases. On May 19, freight rate in the Shanghai-South America route (covering seaborne surcharges) quotes USD3069/TEU, down by 6.5% from one week ago.

  Cargo volume is flat in the Japan route, where spot rate keeps stable. On May 19, freight index in the China-Japan route quotes 660.10, almost in line with that last week.

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