Freight rates declined as market fundamentals were weakened

　　In this week, the transportation demand for China's export container shipping market has fell as it is close to the Christmas Day. Spot market rates on most service routes continued to decline and composite index dropped accordingly. On November 15th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 797.78 points, down by 4.8% compared with previous week.

　　In the Europe route, as most vessels’ ETA to destination will be around Christmas holiday, most cargo owners intended to avoid handling business during that period and postponed their shipments accordingly. Even carriers contracted their capacity supply because of shrinking shipping demand, it still couldn’t stop the loading rate from declining. This week, the average slot utilization rate ex Shanghai Port was about 90%. Affected by this, some carriers cut prices to stretch more consignments. Spot market rate fell accordingly. On November 15th, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) was quoted USD708/TEU, down by 2.9% from one week ago. In the Mediterranean route, the market situation was basically similar to that in Europe. This week, the average slot utilization rate ex Shanghai Port fell to between 80% and 90%, and the spot market freight rate fell again. On November 15th, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) was quoted USD706/TEU, down by 2.1% from one week ago.

　　In the North America route, with the easing of Sino-US trade disputation, cargo owners slowed their paces of shipment arrangement with expectation to enjoy a lower tariff rate. Also affected by the high stock level caused by previous hurry-in-delivery operations, the total shipping demand was seen to decline obviously. This week, the average slot utilization rate ex Shanghai Port to USWC and USEC were both between 90% and 95%. In order to get more shares from the market, carriers reduced their booking rates significantly which intensified the market competition. The spot market freight rates have fallen. On November 15th, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) quoted USD1351/FEU and USD2398/FEU, down by 11.8% and 6.8% respectively compared to last week.

　　In the Persian Gulf route, the market demand was generally stable. The implementation of capacity control was slightly relaxed. This week, the average slot utilization rate ex Shanghai Port was above 90%. Affected by the poor loading rate, some carriers began to lower prices to secure the cargoes. The spot market freight rate fell slightly. On November 15th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD755/TEU, down by 2.3% from previous week.

　　In the Australia/New Zealand route, the cargo volume has declined slightly and there were still capacity control measures on the market. This week, the average slot utilization rate ex Shanghai Port was around 95%. Most carriers lowered their quotations which followed the downward inflection point from last week ending up the 19 consecutive weeks’ rising. The spot market rate dropped significantly. On November 15th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD1056/TEU, down by 10.0% from one week ago.

　　In the South America route, the shipping demand was stable in general. At the same time, carriers maintained their operations on capacity control measures. The relationship between supply and demand kept stable. This week, the average slot utilization rate ex Shanghai Port was above 95%, and many vessels were almost fully loaded. However, due to the large increase in the beginning of the month, the freight rate faced pressure from market acceptance. Also thanks to some carriers’ rate cutting operations to lift up the loading rate, the spot market rate dropped again. On November 15th, freight rate in the Shanghai to South America route (contains seaborne related surcharges) quoted USD1839/TEU, down by 10.1% compared to last week.

　　In the Japan route, cargo volume was stable as well as the market rate. On November 15th, freight index in the China to Japan route quoted 726.90 points, down by 0.9% from previous week.