CCFI Commentary Issue 12, 2018

  Freight Rate Adjusting

  In the week ending March 16, China export box transport market sees the whole demand recovering, but not as good as last year. Box liners control capacity supply in some services, but the whole loading rate still at the lower level. As the whole transport demand is weak, spot booking rate slides repeatedly. On March 16, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quotes 675.46 points, falling by 7.4% from one week ago.

  The transport market in the Europe route recovers gradually. Box liners continue to control capacity, and the average slot utilization rate in the Europe route grows to 80%-85% and that in the Mediterranean route around 80%. Most box liners reduce freight rate to attract more cargo volume, leading spot booking rate slip depressively. On March 16, freight rates in the routes from Shanghai to the Europe and Mediterranean (covering seaborne surcharges) quote USD741/TEU and USD665/TEU, down by 6.3% and 5.1% from last week.

  In the North America route, the whole transport demand keeps stable. As capacity increase fast, demand/supply condition still has no improvement. In the week ending March 16, cargo volume is insufficient, box liners control capacity at different extent, but loading rate goes south. The average slot utilization rates in the USWC and USEC are 75%-85% and 80%-90% respectively. Some box liners begin to reduce freight rate positively, leading spot rate tumbling. On March.16, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1016/FEU and USD2009/FEU, down by 11.1% and 7.9%from one week ago respectively.

  Transport demand performs flat in the Persian Gulf route, where box liners carry out capacity limit measures, but has less achievement, with the average slot utilization rate 70%-80%. For the large excess supply of ship spaces, spot rate slides seriously. On March 16, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) quotes USD384/TEU, tumbling by 10.1% comparing with one week ago.

  In the Australia/New Zealand route, transport demand recovers slowly as the end of the Spring Festival Holiday, the average slot utilization rate is between 60% and 70%. For the large excess of ship spaces, box liners choose to reduce freight rate, causing spot rate slip continuously. On March 16, freight rate in the Shanghai-Australia/New Zealand route quotes USD933/TEU, falling by 7.0% against one week ago.

  In the South America route, transport demand recovers, and the average slot utilization rate keeps 90%-95%. Most box liners hold stand-by attitude towards the mid March freight rate increase plan, leading Spot rate starts to tumble. On March 16, freight rate in the Shanghai-South America route (covering seaborne surcharges) has a week-on-week decrease of 16.1% to USD2007/TEU.

  In the Japan route, spot rate rises faintly. On March 16, freight index in the China-Japan route quotes 726.36 points, up by 3.5% from one week ago.


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