CCFI Commentary Issue 35, 2017

  Most Freight Rate Keeping Declining

  Sept 4--China export box transport market sees demand stable, but as competition stiffens, freight rate increase plan in most routes decline, only part of them keeping firmed. The comprehensive index slips. On Aug.25, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quotes 821.35 points, down by 4.5% against one week ago.

  As Euro zone economy recovery speed keeps stable, transport demand is stable in the Europe route. The average slot utilization rate in the Europe routes stand around 95% and that in the Mediterranean route above 90%. Most box liners choose to maintain freight rate, causing spot rate shaking narrowly. On Aug.25, freight rates in the routes from Shanghai to Europe and Mediterranean (covering seaborne surcharges) quote USD923/TEU and USD822/TEU, up by 0.5% and down by 1.1% from one week ago respectively.

  Cargo volume stands on the relatively high level in the North America route. The average slot utilization rates in the USWC and USEC routes are beyond 95% and 90% relatively. Box liners reduce freight rate for the sake of market share, leading spot rate going south. On Aug.25, freight rate in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1541/FEU and USD2419/FEU, tumbling by 7.1% and down by 6.7% from one week ago respectively.

  The Persian Gulf route sees cargo volume flat as the weak consumption in destination. The average slot utilization rate leaving off Shanghai Port hovers 75%-80%, with capacity still over-supplied. As a result, most box liners choose to decrease freight rate, Owing to the lower loading rate, box liners reinforce to reduce freight rate, leading spot rate slip for ten consecutive weeks. On Aug.25, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quote USD475/TEU, decreasing by 13.3% from one week ago.

  Transport demand increases firmly in the Australia/New Zealand route, where the average slot utilization rate stands above 90%, with some even demand/supply condition goes better, spot rate begin to increase slightly. On Aug.25, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne surcharges) has a week-on-week increase of 5.1% to USD514/TEU.

  Cargo volume in the South America route keeps at the relatively high level, where the average slot utilization rate hovers between 95%-100%, and vessel space in the East coast and West Coast route keeping short-supplied. However, owing to the competition, box liners reduce freight rate one by one, leading spot rate slip continuously. On Aug.25, freight rate in the Shanghai-South America route (covering seaborne surcharges) quote USD2583/TEU, tumbling by 9.1% against one week ago, a slip for eight consecutive weeks (decreasing by 32.2% comparing by eight weeks ago).


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