Softened North America Market tugged down the total market performance
In this week, China's export container transportation market had stable transportation demand during the traditional peak season and supply-and-demand relationship was in healthy level on most service routes. However, due to the fall in freight rates on the North America routes, the composite index declined slightly. On August 9th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 822.09 points, down by 1.1% compared with previous week.
In the Europe route, the transportation demand remained at a high level when market entered into the peak season. Although there were mega vessels being deployed into this service route, the supply-and-demand relationship kept at good level. This week, the average slot utilization rate ex Shanghai Port was almost close to 100%, and most vessels were fully loaded when departed. Most carriers maintained their quotes without change on basis of increased rates from last week, and the booking rates on some voyages were increased due to tight space. On August 9, the freight rate (marine and shipping surcharge) of Shanghai's export to the European basic port market was US$810/TEU, up slightly by 0.5% from the previous period. On August 9th, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) was quoted USD810/TEU, slightly up by 0.5% from one week ago. The market freight rate has risen for three consecutive weeks, with a cumulative increase of 20.6%.In the Mediterranean route, transportation demand has been stable. As there were a few temporary blank sailing operations, the tight space situation has been slightly intensified. This week, the average slot utilization rate ex Shanghai Port was nearly 100%, and most vessels departed with full loads. Due to strong demand, some carriers have begun to impose a new round of peak season surcharge (PSS) on the vessels departing from August 15th. The spot market freight rate continued to rise sharply. On August 9th, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) was quoted USD974/TEU, hiked by 14.6% from one week ago. The market freight rate has risen for three consecutive weeks, with a cumulative increase of 40.3%.
In the North America route, affected by the deterioration of Sino-US trade friction, the situations of delay or even cancel of contracts by cargo owners have increased. The shipping demand performance on quantity and stability was weaker than those of the same period in previous years. In order to get accustomed to the changing market situations, the carriers continuously optimized their route deployments, and the overall capacity has remained stable. This week, the average slot utilization rate ex Shanghai Port to the USWC and USEC routes both remained at around 95%, but some vessels have fallen below 90%. Affected by the weak market fundamentals, most carriers adjusted back the freight rates from previous rates hiking level. The spot market freight rates dropped significantly. On August 9th, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) quoted USD1474/FEU and USD2660/FEU, down by 7.2% and 5.0% respectively compared to last week.
In the Persian Gulf route, the geopolitics in the destination area were still in tense which led to a weak shipping demand performance. In terms of capacity, there were still blank sailing operations that benefited the relationship between supply and demand to be in relatively stable. This week, the average slot utilization rate ex Shanghai Port remained above 90%. Due to the cautious attitudes of most carriers toward the development of the market, the spot market rate slightly fell. On August 9th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD683/TEU, down by 4.2% from previous week and kept declining for nine consecutive weeks.
In the Australia/New Zealand route, transportation demand has remained at an annual high level, and the balance of supply and demand kept in healthy level. This week, the average slot utilization rate ex Shanghai Port remained above 95%, and there were many vessels which were already over booked for spaces. After consecutive rises, the increasing pace of spot rate has slowed down. The booking rates of different vessels fluctuated, and the freight index has risen slightly. On August 9th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD591/TEU, up by 2.2% from one week ago. The freight index has been rising for 8 consecutive weeks with a cumulative increase of 137.4%.
In the South America route, the cargo volume performed well, and some carriers have expanded their capacity accordingly. This week, the average slot utilization rate ex Shanghai Port was almost close to 100%. Thanks to the strong market fundamentals, some carriers have imposed large amount of peak season surcharges (PSS) since August 15th, and the spot market freight rates have risen sharply. On August 9th, freight rate in the Shanghai to South America route (contains seaborne related surcharges) quoted USD2104/TEU, up by 8.7% compared to last week.
In the Japan route, cargo volume kept stable, and the freight rate slightly dropped. On August 9th, freight index in the China to Japan route quoted 725.11 points, down by 1.1% from previous week.