Spot rates slid as shipping demand performance softened

In this week, the growth of transportation demand in China's export container shipping market slowed down. Freight rates on most trade lanes dropped, and the composite index fell accordingly. On November 16th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 951.57 points, down by 1.1% from previous week.

In the Europe route, as the rush cargo for Christmas almost ended up, cargo bookings was seen slowing down. This week, the average slot utilization rate ex Shanghai was about 95%. The space tight situation has been eased. Spot market rate dropped by some carriers’ cut-for-compete strategy. On November 16th, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) quoted USD735/TEU, down by 2.4% from one week ago. In the Mediterranean route, shipping demand slid down which dragging the spot market rate to fall. On November 16th, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) quoted USD757/TEU, down by 1.3% from last week ago.

In the North America routes, as the Sino-US trade disputes went on, market transportation demand has remained at a relatively high level by cargo owner’s accelerating on cargo delivery. The average slot utilization rate ex Shanghai kept over 95% with most of the voyages departing with full loads. In the USEC route, with the transportation peak of pre-Christmas past temporary deployed vessel capacities appeared in the market, the tight space situation was eased. Spot rates slight dropped by a few carriers’ rate-cut-operation. On November 16th, freight rates in the routes from Shanghai to USWC (including seaborne related surcharges) quoted USD2529/FEU, down by 1.8% compared to last week. In the USEC route, vessel space was always in short supply by exuberant demand. Some carriers raised their booking rates for the small amount of available spaces. On November 16th, freight rates in the routes from Shanghai to USEC (including seaborne related surcharges) quoted USD3739/FEU, up by 3.5% compared to last week.

In the Persian Gulf route, due to the long-term low demand situation on this route, many carriers continued to introduce capacity contracting operations. The average slot utilization rate ex Shanghai thus maintained around 95%. In order to increase the cargo loads, some carriers decreased their booking rates. On November 16th, freight rate in the Shanghai to Persian Gulf route (including seaborne related surcharges) quoted USD518/TEU, down by 1.9% from previous week.

In the Australia/New Zealand route, as the transportation peak for Christmas was almost ended up, cargo volume turned down. This week, the average slot utilization rate ex Shanghai was about 90%. The market competition has intensified. In order to maintain the market shares, most carriers lowered their booking rate and the spot market rate fell. On November 16th, freight rate in the Shanghai to Australia/New Zealand route (including seaborne related surcharges) quoted USD675/TEU, down by 8.2% against one week ago.

In the South America route, transportation demand fluctuated to slide. This week, the average slot utilization rate ex Shanghai was down to 85%. As the rate hiking plans almost failed at month begin, some carriers had to adjust back their rate and spot market rate level dropped. On November 16th, freight rate in the Shanghai-South America route (including seaborne related surcharges) quoted USD1185/TEU, down by 4.7% compared to last week.

In the Japan route, shipping demand and market rate were both stable. On November 16th, freight index in the China to Japan route quoted 711.22 points, almost in line with last week.