Spot market rate continued to rise due to improved market fundamentals

　　In this week, the overall volume of China's export container shipping market reversed the downward trend and rebounded. At the same time, the market fundamentals have improved with the help of carriers’ firm capacity controlling measures. As most carriers began to collect the new low-sulfur surcharges as per rules of IMO 2020, the booking rates on most service routes have kept rising which pushed the composite index up. On December 6th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 850.27 points, up by 3.7% compared with previous week.

　　In the Europe route, the market has come out of the trough after the exhausting of rush cargoes for Christmas season. And with the approaching of the coming peak season before the Spring Festival, the market's transportation demand has recovered rapidly. At the same time, there were still certain scale of capacities be moved out from the service, and market supply and demand relationship has improved significantly. This week, the average slot utilization rate ex Shanghai Port was above 95%, and most vessels were fully loaded. Supported by this, most carriers have begun to levy new low-sulfur related surcharges. Due to the tight space situation, the booking rates for some voyages have been increased, and the spot market freight rate has increased significantly. On December 6th, freight rate in the route from Shanghai to Europe route (including seaborne related surcharges) was quoted USD800/TEU, up by 4.4% from one week ago. In the Mediterranean route, the speed of recovery of transportation demand was slightly slower than that of European route, but with the help of carriers' large-scale capacity contracting operations, the relationship between supply and demand has still improved significantly. This week, the average slot utilization rate ex Shanghai Port was between 90% and 95%. As the market recovering momentum was stable, some carriers followed the imposing of new low-sulfur surcharges, and the spot market freight rates rose. On December 6th, freight rate in the route from Shanghai to Mediterranean route (including seaborne related surcharges) was quoted USD771/TEU, up by 5.6% from one week ago.

　　In the USWC route, the sign of the rush cargoes before “Spring Festival" has emerged which supported the shipping demand to rise. At the same time, carriers have maintained the large scale of capacity contracting operations, which had the relationship between supply and demand to be improved. This week, the average slot utilization rate ex Shanghai Port was about 90% ~ 95%. Driven by the improving fundamentals, some carriers followed to raise their quotations, and the spot market rates increased accordingly. On December 6th, freight rate in the route from Shanghai to USWC route (including seaborne related surcharges) was quoted USD1509/FEU, up by 7.4% compared to last week. In the USEC route, Market supply and demand fundamentals were stable and in healthy. This week, the average slot utilization rate ex Shanghai Port was above 95%. However, due to the long distance between China and USEC, carriers charges much higher new LSS than other service routes. In order to maintain customers’ relationship, some carriers slightly adjusted back their all in quotations and spot market rate slightly fell back. On December 6th, freight rate in the route from Shanghai to USWC and USEC route (including seaborne related surcharges) was quoted USD1509/FEU and USD2638/FEU, up by 7.4% and down by 1.7% respectively compared to last week.

　　In the Persian Gulf route, the transportation demand has stabilized at recent high level. There was still a certain degree of capacity contracting which helped to maintain the relationship between supply and demand in healthy level. This week, the average slot utilization rate ex Shanghai Port was about 95%. Backed by the strong market fundamentals, the booking rates on most voyages were increased by carriers, and the spot market rates have continued to rise significantly. On December 6th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) was quoted USD930/TEU, up by 11.4% from previous week.

　　In the Australia/New Zealand route, transportation demand continued to decline. Although carriers still implemented a certain scale of capacity contracting operations, it still failed to prevent the continuous deterioration of the supply and demand relationship. This week, the average slot utilization rate ex Shanghai Port was about 85%, and the load rate of some vessels even has fallen below 80%. Affected by the overcapacity situation, booking rates on most vessels have fallen by various degrees, and spot market rates have continued to drop. On December 6th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) was quoted USD760/TEU, down by 6.9% from one week ago.

　　In the South America route, the transportation demand was strong enough to keep the relationship between supply and demand in healthy level. This week, the average slot utilization rate ex Shanghai Port was above 95%, and several flights were fully loaded. However, due to the differentiations among carriers’ market strategies, the booking rates fluctuated, and the index increased slightly as a whole. On December 6th, freight rate in the Shanghai to South America route (contains seaborne related surcharges) quoted USD1747/TEU, up by 4.8% compared to last week.

　　In the Japan route, cargo volume was stable. The market rate slightly increased. On December 6th, freight index in the China to Japan route quoted 728.19 points, up by 1.8% from previous week.