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CCFI Commentary Issue 10, 2018

  Demand Is Flat and Rate Slip

  In the week ending March 2, China export box transport market sees the whole demand is weak, and the average slot utilization rates in most routes slip. As a result, competition tights and the spot booking rate tumbles. On March 2, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quotes 772.45 points, falling by 9.6% from one week ago.

  The transport market in the Europe route recovers slowly. Although capacity limit measures are carried out, cargo volume is not insufficient, and the average slot utilization rate in some routes below 80%. Simultaneously, as capacity is expected to have a faster recovery speed than cargo volume, most box liners reduce freight rate positively, leading booking rate in spot market falling. On March 2, freight rates in the routes from Shanghai to the Europe and Mediterranean (covering seaborne surcharges) quote USD827/TEU and USD721/TEU, down by 9.7% and 9.5% from last week.

  In the North America route, transport demand is insufficient seriously. In terms of capacity, some box liners withdraw 30% capacity, but still fail to improve demand/supply condition. The average slot utilization rates in the USWC and USEC decline to 70% and 80% respectively. Box liners compete to decrease freight rate in order to attract more cargo volume, leading booking rate in the spot market tumbling. On March.2, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1252/FEU and USD2375/FEU, down by 11.3% and 12.3% from one week ago respectively.

  Transport demand is flat in the Persian Gulf route, where demand/supply condition keeps weak and the average slot utilization rate is below 80%. Most box liners reduce freight rate, leading spot rate tumbling forcefully. On March 2, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD465/TEU, tumbling by 18.6% comparing with one week ago.

  In the Australia/New Zealand route, transport demand tends to be weak after the Spring Festival Holiday, and the average slot utilization rate leaving off Shanghai Port slides continuously. Owing to demand supply gap widens, box liners strengthen measures to attract cargo volume, leading spot rate declining fast. On March 2, freight rate in the Shanghai-Australia/New Zealand route quotes USD1136/TEU, falling by 10.1% against one week ago.

  In the South America route, transport demand is weak, and the average slot utilization rate falls at different levels. For the fragile demand/supply condition, spot rate fails to stabilize and start to slide. On March 2, freight rate in the Shanghai-South America route (covering seaborne surcharges) has a week-on-week decrease of 9.1% to USD2309/TEU.

  Cargo volume and spot rate slip in the Japan route. On March 2, freight index in the China-Japan route quotes 715.83 points, down by 1.2% from one week ago.

  

 
 
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