Carrier implemented rate hiking on most service routes backed by strengthening market fundamentals
In this week, the overall supply and demand relationship of China's export container shipping market was generally positive. Affected by the "Lunar New Year" earlier than in previous years, shipments on several routes have started to increase before the long holiday. Carriers pushed up freight rates on multiple routes from mid of this month, and composite index rose accordingly. On December 13th, Shanghai (Export) Containerized Freight Index (SCFI) issued by Shanghai Shipping Exchange (SSE) quoted 880.44 points, up by 3.5% compared with previous week.
In the Europe route, the cargo volume increased steadily as market entered into the traditional pre-holiday peak season. There was still certain scale of capacity controlling measures on the market which helped the supply and demand relationship remained good. This week, the average slot utilization rate ex Shanghai Port was almost close to 100%. Backed by the strong fundamentals, most carriers increased their booking rates on voyages from mid of this month, and spot market rate increased significantly. On December 13th, freight rate in the route from Shanghai to Europe (including seaborne related surcharges) was quoted USD893/TEU, hiked by 11.6% from one week ago. In the Mediterranean route, the market performance was more active, most vessels were fully loaded. Spot market rate rocketed up by carriers’ rate hiking plans. On December 13th, freight rate in the route from Shanghai to Mediterranean (including seaborne related surcharges) was quoted USD1083/TEU, soared up by 40.5% from one week ago.
In the North America route, as the Lunar New Year approached, the market volume rebounded. Due to the influence of the China-US trade negotiation process and expectations of relevant tariff policies, some consignors still had the willingness to postpone shipments. However, there was still a gap between capacity supply and shipping demand. Carriers had to maintain their capacity contracting operations to improve the market fundamentals. This week, the average slot utilization rates ex Shanghai Port to USWC and USEC were both around 95%. The market competition was intensified as carriers competed for their market shares. Spot market rate went down as some carriers lowered their quotations. On December 13th, freight rates in the routes from Shanghai to USWC and USEC (including seaborne related surcharges) quoted USD1370/FEU and USD2512/FEU, down by 9.2% and 4.8% respectively compared to last week.
In the Persian Gulf route, the transportation demand was steadily increasing, and some carriers still had capacity controlling measures such as blank sailing and replacement of smaller vessels. This week, the average slot utilization rate ex Shanghai Port was above 95%, and many vessels departed with full loads. Affected by this, some carriers raised their booking prices again, and the spot market freight rate continued to rose. On December 13th, freight rate in the Shanghai to Persian Gulf route (contains seaborne related surcharges) quoted USD1017/TEU, up by 9.4% from previous week.
In the Australia/New Zealand route, even the cargo volume has slightly recovered, the market was still oversupplied. This week, the average slot utilization rate ex Shanghai Port was between 80% and 90%. Carriers’ pricing strategies for the market were slightly different, and market freight rates fluctuated. The spot market rates have declined slightly. On December 13th, freight rate in the Shanghai to Australia/New Zealand route (contains seaborne related surcharges) quoted USD740/TEU, down by 2.6% from one week ago.
In the South America route, the performance of transportation demand was strong, and the supply-demand relationship has generally remained healthy. This week, the average slot utilization rate ex Shanghai Port was above 95%, and most vessels were fully loaded. As carriers began to collect new low-sulfur surcharges, the spot market freight rate has risen significantly. On December 13th, freight rate in the Shanghai to South America route (contains seaborne related surcharges) quoted USD2014/TEU, hiked by 15.3% compared to last week.
In the Japan route, cargo volume was stable, and the market freight rate slightly rebounded. On December 13th, freight index in the China to Japan route quoted 742.00 points, up by 1.9% from previous week.