Spot market rate declined on most service routes as softened market fundamentals

　　In this week, China's export container shipping market was generally weak, and transportation demand growth rate was slow down. Spot market rate fell on most service routes, which dragged down the composite index. On August 23rd, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 774.62 points, down by 3.6% compared with previous week.

　　In the Europe route, according to data released by ZEW, the Eurozone's ZEW economic sentiment index in August was -43.6, down 23.3 points from the previous month. The transportation demand still remained stable, but it seemed to be lack of power to grow. As the carriers gradually expanded their capacity supply to meet the expected cargo volume during the peak season, the supply-and-demand balance was under certain pressure. This week, the average slot utilization rate ex Shanghai Port has dropped to around 95%. In order to maintain market share, the carriers lowered their freight rates to get more consignments, and the spot market rate went down. On August 23rd, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) was quoted USD793/TEU, down by 2.3% from one week ago. In the Mediterranean route, it was basically similar to the European route, but the market situation was weaker and the spot market rate declined more. On August 23rd, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) was quoted USD969/TEU, down by 4.7% from one week ago.

　　In the North America route, according to data released by the Federal Reserve, the monthly industrial output rate of the United States in July was -0.2%, a decrease of 0.4 from the previous value. Due to the ongoing trade friction between China and the United States, the transportation demand on the North American route has decreased. Although market has entered the traditional peak season, the market fundamentals were poorer than previous expectations. This week, the average slot utilization rate ex Shanghai Port was hovering between 90% and 95%. Due to pessimistic outlook on the market, spot market rate continued to fall. On August 23rd, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) quoted USD1286/FEU and USD2436/FEU, down by 6.0% and 4.2% respectively compared to last week.

　　In the Persian Gulf route, the geopolitics risk of the destination area has been moderated, and the overall market tends to be stable. Some carriers have implemented the capacity controlling measures to improve the market fundamentals. The supply-and-demand relationship was turned to be relatively stable. This week, the average slot utilization rate ex Shanghai Port has risen to over 90%. Spot market rate kept stable. On August 23rd, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD685/TEU, almost kept in line with previous week.

　　In the Australia/New Zealand route, the market kept warming during the peak season, transportation demand continued to grow. Meanwhile, the carriers continued to control their capacity supply and the supply-and-demand relationship was in healthy level. This week, the average slot utilization rate ex Shanghai Port has risen to over 95%. The excess supply of capacity has been significantly improved. Spot market freight rates continued to rise. On August 23rd, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD660/TEU, up by 8.4% from one week ago.

　　In the South America route, both the cargo volume and capacity supply were generally stable, and the supply-and-demand relationship remained balanced. This week, the average slot utilization rate ex Shanghai Port remained at around 95%. The spot market rate has dropped this week. On August 23rd, freight rate in the Shanghai to South America route (contains seaborne related surcharges) quoted USD1881/TEU, down by 7.2% compared to last week.

　　In the Japan route, cargo volume kept stable, and the freight rate slightly rebounded. On August 23rd, freight index in the China to Japan route quoted 731.96 points, up by 1.4% from previous week.