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CCFI Commentary Issue 48, 2017

  Demand Is Flat with Rate Rising

  China export box transport market sees demand no improvement and capacity still over-supplied. Box liners try to push up freight rate in the ocean-going services, but have less achievement, leading the comprehensive index having a narrow growth. On Dec.1, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quotes 732.04 points, up by 3.8% against one week ago.

  Transport demand is flat and the oversupply of capacity still worsens in the Europe route, where the average slot utilization rate is below 90%. For the stiffening competition, most of box liners plan to hike freight rate with the extent of USD50-100/TEU, with spot rate growing slightly. On Dec.1, freight rate in the Shanghai-Europe route (covering seaborne surcharges) quotes USD729/TEU, up by 5.0% from one week ago. In the Mediterranean route, transport demand decreases more than that in the Europe route, where the average slot utilization rate tumbles to below 80%, with small part of box liners trying to push up, but most box liners still choose to sustain freight rate, with spot rate rising slightly. On Dec.1, freight rate in the Shanghai-Mediterranean route (covering seaborne surcharges) quotes USD598/TEU, up by 0.8% against one week ago.

  As the data issued by U.S. Department of Commerce, the personal income and outcome in the U.S. are growing repeatedly, which stabilizes transport demand. However, as the capacity expands slowly, the average slot utilization rate in the USWC is below 90%, and that in the USEC hovers around 90%. For the excess supply of ship spaces, most of box liners are cautious to pushing up the freight rate, leading spot rate growth less than announcement. On Dec.1, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1177/FEU and USD1901/FEU, rising by 7.3% and 13.1% from one week ago respectively.

  In the Persian Gulf route, transport demand recovers and the average slot utilization rate bounds to around 85%. Owing to the improving market condition, most of box liners sustain freight rate, with spot rate fluctuating. On Dec.1, freight rate in the Shanghai-Persian Gulf route (covering seaborne charges) has a week-on-week downside of 2.5% to USD391/TEU.

  The rising consumption in the destination supports transport demand in the Australia/New Zealand route, where the average slot utilization rate reaches nearly 100%. In terms of freight rate, as box liners strive to canvass, spot rate decreases somehow. On Dec.1, freight rate in the Shanghai-Australia/New Zealand route (covering seaborne surcharges) quotes USD1280/TEU, falling by 5.7% against one week ago.

  The South America route sees Transport demand stable and the demand/supply condition on the good condition, where the average slot utilization rate sustains around 95%. However, as freight rate at the relatively high level, box liners’ freight rate increase plan is not accepted by the market, leading spot rate rising slightly. On Dec.1, freight rate in the Shanghai to South America route (covering seaborne surcharges) quotes USD2725/TEU, up by 4.3% from one week ago.

  Cargo volume and spot rate keeps stable in the Japan route. On Dec.1, freight index in the China-Japan route quotes 669.93 points.

 
 
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