Freight rates fell on most shipping routes by declined shipping demand
In this week, the China export container transportation demand was seen declining on most shipping routes except services to North America. Freight rates thus dropped accordingly. On September 9th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 921.36 points, down by 1.9% from previous week.
In the Europe route, as the traditional transportation peak season was coming to an end, the shipping volume showed signs of declining. At the same time, the deployment of new mega vessels eased the tighten situation of space supply. This week, the average slot utilization rate ex Shanghai was about 95%. Affected by above factors, some carriers cut their booking rates accordingly to stretch more loads. On September 9th, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) quoted USD885/TEU, down by 5.1% from one week ago. In the Mediterranean route, market situation was almost similar with that on Europe route. The average slot utilization rate ex Shanghai was between 90% ~ 95%. Some carriers slightly reduced their tariff rates. On September 9th, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) quoted USD870/TEU, down by 4.2% from last week ago.
In the North America route, some of the US economic indicators were in healthy level. According to latest released date, the Conference Board Consumer Confidence Index increased in August, following a modest increase in July. The Index stood at 133.4, up from 127.9 in July, much higher than expectation. The rising consumption drove the volume of goods to keep increasing. Also affected by the Sino-US trade friction, cargo owners rushed to ship before the relevant tariff policy come into force. On the other hand, the market capacity remained stable after the contraction. Affected by the above-mentioned factors, the space supply was tight and most vessels departed ex Shanghai with full loads. Spot market rate kept in rising trend and the rate hiking plan at month beginning was almost accepted by the market. On September 9th, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) quoted USD2332/FEU and USD3518/FEU, up by 1.5% and 0.9% respectively compared to last week.
In the Persian Gulf route, due to adverse effects of the unstable factors in the destination and the surplus capacity, the market volume has not improved after the Eid al-Adha. Some carriers had to cut off space supply by suspension some of the shipping services. The average slot utilization rate ex Shanghai was between 85% ~ 95%. Carriers had to reduce their booking rate to competing for ship loading, leading to a drop of the spot market rate. On September 9th, freight rate in the Shanghai to Persian Gulf route (including seaborne related surcharges) quoted USD391/TEU, down by 4.4% from previous week.
In the Australia/New Zealand route, the volume of the market has decreased compared with the previous period. The average slot utilization rate ex Shanghai was about 90%. In terms of freight rates, as market competition has intensified, most carriers had to undersell their spaces to canvass more shipping orders. On September 9th, freight rate in the Shanghai to Australia/New Zealand route (including seaborne related surcharges) quoted USD559/TEU, down by 5.3% against one week ago.
In the South America route, influenced by the depreciation of some countries' currencies, the purchase power declined leading to a decline in the shipping volume. The average slot utilization rate ex Shanghai was between 90% ~ 95%. The spot market rate fell back after the rate hiking at month beginning. As the market competition intensified, the spot market rate fell sharply. On September 9th, freight rate in the Shanghai-South America route (including seaborne related surcharges) quoted USD1311/TEU, greatly down by 25.2% compared to last week.
In the Japan route, shipping demand maintained stable, and market rate waved slightly. On September 9th, freight index in the China to Japan route quoted 715.51 points, down by 0.7% compared with last week.