Weekly Commentary on China Containerized Transportation

Zhu+Pengzhou

In the week ending July 17, China export box market sees transport demand stable. Boosted by some box liners hiking freight rate, the China Export Containerized Freight Index, which represents the whole market, rises slightly. On July 17, CCFI issued by Shanghai Shipping Exchange (SSE) quotes 842.87points, up by 4.7% from one week ago. However, owing to the tightened demand/supply condition, box liners have to reduce freight rate to lock market share, causing booking rate in many trades decline largely. On July 17, Shanghai Export Containerized Freight Index issued by SSE falls by 10.9 percent from last week to 593.20 points.

In the Europe service, the uncertainty Economy makes a negative impact on the transport demand, which sees no increase despite of the peak season. In spite of capacity limit by box liners, as the fast delivery of mega vessels, spot rate slumps depressively. On July 17, freight rates in the trades from Shanghai to Europe and Mediterranean quote USD 518/TEU and USD529/TEU, diving by 25.9% and 28.2% from one week ago respectively.

Cargo volume keeps increasing firmly in the US market. As data from Alphaliner, in spite of the bad weather, cargo volume had a year-by-year increase of 0.8% in Q1, and rose by 2.8% from one year before in May. This week, the average slot utilization rates in the USWC and USEC services are below 85% and 90%, both lower than that last year. Hit by the oversupply of demand/supply condition, most box liners conceal the freight rate increase plan that was scheduled in mid July, with spot rate slip constantly. On July 17, freight rates in the trades from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1175/FEU and USD2635/FEU, falling by 8.2% and 6.3% against one week ago.

In the Persian Gulf service, transport demand is weak overall because of the sufficient stock. Simultaneously, since the newly opened trades, most box liners hold negative attitude towards post market, and have to reduce freight rate to lock market shares, causing spot rate bottoms down to make a fresh low in this year. On July 17, freight index in the China-Persian Gulf service quotes 767.35 points, down by 2.5% from one week ago.

Cargo volume tends to be stable in the South America service, which sees demand/supply condition has some improvement in general, but tonnage is still oversupplied heavily. The average slot utilization rate in this service stands around 90%. On July 17, freight index in the China-South America service falls by 6.1% from one week ago to 460.83 points. According to information from the market, aiming to improve operation condition, some box liners try to cooperate to be more competitive, which has no impact on the market temporally.

Transport demand keeps stable in the Japan service, where the average slot utilization rate hovers at around 60%, with spot rate firm. On July 17, freight index in the China-Japan service quotes 633.47 points.

(Please contact the Information Dept of SSE for more details.)endprint