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CCFI Commentary Issue 47, 2018

  Spot rates on different routes diversified

  In this week, China's export container shipping market fluctuated as trend of freight rates on different service routes diversified. The total shipping demand slightly rebounded when market just came close to the year end. However, affected by the continuous falling rate on North America trade lane, the composite index of SCFI fell. On December 21st, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) was quoted 833.85 points, down by 1.7% from previous week.

  In the Europe route, as the New Year approached, consumption demand at the destination market continued to be warmed up which steadily lift up the cargo volume accordingly. This week, the average slot utilization rate ex Shanghai Port was stable at over 95%, and most of the voyages were fully loaded. Some carriers increased their booking rate again, leading to a new round hiking of spot rate. On December 21st, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) was quoted USD872/TEU, up by 4.8% from one week ago. In the Mediterranean route, the market supply and demand relationship was slightly weaker to that of the European route. The average slot utilization rate ex Shanghai was about 95%. Some carriers pushed up their booking rates due to limited available space and spot market rate kept rising. On December 21st, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) was quoted USD839/TEU, up by2.2% from one week ago.

  In the North America routes, even there was a break time for Sino-US trade conflict, the transportation demand as already been greatly overdraft in previous months and the cargo volume dropped significantly. Although some carriers have cut the capacity supply by certain degree, they still suffered from a dead space. This week, the average slot utilization rate ex Shanghai Port was slid down to 90%. Affected by the above fundamentals, the carriers had to lowered their booking rates, and the freight rates on the USWC and USEC both fell On December 21st, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) were quoted USD1763/FEU and USD2750/FEU, down by 8.9% and 5.2% respectively compared to last week.

  In the Persian Gulf route, the supply and demand relationship was stable in recent period. In view of the fact that the cargo volume has been in low level for a long time, some carriers introduced space contracting measures, such as cancelling or combining service routes, to improve the market fundamental. This week, the average slot utilization rate ex Shanghai Port increased to 95% with specific voyages departing with full loads. Affected by above, some carriers implemented new round of GRI and spot market rate jumped up. On December 21st, freight rate in the Shanghai to Persian Gulf route (including seaborne related surcharges) was quoted USD597/TEU, greatly up by 12.6% from previous week.

  In the Australia/New Zealand route, the market performance was dull in recent period. Cargo volume was only seen to be slightly rebounded before the coming New Year Holiday. The utilization rate ex Shanghai Port among the carriers had a large difference, and the average utilization rate was only about 80% even with some blank sailing voyages. Most carriers still maintained their freight rate level without change, and the spot market freight rate stood at low level. On December 21st, freight rate in the Shanghai to Australia/New Zealand route (including seaborne related surcharges) was quoted USD564/TEU, almost kept in line with one week ago.

  In the South America route, due to the unsatisfactory economic situation at destination, the transportation market demand was at relatively low level. Some carriers implemented blank sailing operation. This week, the average slot utilization rate ex Shanghai Port was between 85% and 95%. Some carriers adopted a small price reduction to compete for their respective market shares. The spot market freight rate has fallen under pressure On December 21st, freight rate in the Shanghai-South America route (including seaborne related surcharges) quoted USD616/TEU, down by 5.1% compared to last week, a 7 consecutive weeks falling with the downward pace narrowed.

  In the Japan route, shipping demand was stable, and market rate slightly down. On December 21st, freight index in the China to Japan route quoted 714.09 points, slightly down by 1.8% from last week.

 
 
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