Spot market rates dropped on most service routes as market fundamentals weakened
In this week, the increasing trend of cargo volume of China's export container shipping market was softened. The spot market rates on most service routes declined and the composite index went down accordingly. On September 6th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 795.05 points, down by 3.0% compared with previous week.
In the Europe route, although the market was still in the traditional peak season, the growth rate of transportation demand was slowing down. Some carriers implemented temporary blank sailing operations which led to a slight decline of overall market capacity scale, and the supply-and-demand balance has remained stable. This week, the average slot utilization rate ex Shanghai Port was about 95%. As the sign of rush cargo before “Mid-Autumn Festival” and “National Day” holiday was not obvious, the market available space was abundant. In order to maintain the ship's loading rate level, most carriers lowered their booking freight rates and the spot market freight rate continued to decline. On September 6th, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) was quoted USD710/TEU, down by 6.2% from one week ago. In the Mediterranean route, the market shipping demand was generally stable, but the utilization rate of each carrier's space was diversified. This week, the utilization rate of each departed vessel was within the range of 90% to 100%. Affected by this, some carriers slightly cut down their quotations to increase the loading rate, and the spot market freight rate fell slightly. On September 6th, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) was quoted USD877/TEU, down by 2.0% from one week ago.
In the North America route, the long-term effects of Sino-US trade friction began to appear: the shipping demand became volatile. The overall cargo volume maintained its upward trend during the peak season, but it still did not meet the performance of the same period of the previous year as well as the expectations from carriers. Carriers have reduced the numbers of temporary voyages, but the market fundamentals have not been further strengthened. This week, the average slot utilization rates ex Shanghai Port on the USWC and USEC routes both maintained at around 95%. Due to the fact that there were still plenty of available capacities, many carriers have adjusted back the freight rates from previous hiking, while some others who kept waiting and watching slightly increased their quotations. The spot market freight rates have declined slightly in total. On September 6th, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) quoted USD1566/FEU and USD2631/FEU, down by 3.0% and 2.2% respectively compared to last week.
In the Persian Gulf route, due to the relatively sluggish commercial activities in the destination area, the destocking rate of products was slow, and the lack of new demand caused the cargo volume to be weak. In order to maintain the balance between supply and demand, carriers took certain scale of blank sailing operations. This week, the average slot utilization rate ex Shanghai Port was between 90% and 95%. Most of the carriers made small adjustments to their booking rates with more downward adjustments than upward ones. The spot market freight rate fell slightly. On September 6th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD633/TEU, down by 3.7% from previous week.
In the Australia/New Zealand route, market transportation demand remained at a high level, and with the help of capacity control measures, the capacity supply continued to be tightened. This week, the average slot utilization rate ex Shanghai Port was over 95%, and there were many voyages departing with full loads. Due to the stable market fundamentals, most carriers maintained the hiked rate, and the spot market price continued to rise driven by the follow-up of a small number of carriers. On September 6th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD790/TEU, up by 2.6% from one week ago.
In the South America route, the cargo volume remained stable. With the continuous capacity contracting measures, the supply and demand relationship kept at a good level. This week, the average slot utilization rate ex Shanghai Port has remained above 95%. Due to the fact that some carriers’ GRI plans from last week failed to obtain the following up of others, they adjusted back the freight rates to protect the market share. The spot market freight rate dropped back. On September 6th, freight rate in the Shanghai to South America route (contains seaborne related surcharges) quoted USD1866/TEU, down by 6.7% compared to last week.
In the Japan route, cargo volume kept stable as well as the freight rate. On September 6th, freight index in the China to Japan route quoted 734.03 points, almost kept in line with previous week.