Weekly Commentary on China Containerized Transportation

Liu Zijia

In the first week after the Chinese New Year, China export container transport market performs weak overall. Although most box liners continue to implement measures to shrink capacity, cargo volume supply shortage situation still causes the oversupply of capacity and freight rates in many services slip further. On Feb.19, China (Export) Container Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE) quotes 762.51 points, down by 1.3% over the previous period; Shanghai Containerized Freight Index (SCFI) was 486.70 points, falling by 14.2% over last week.

Cargo volume sluggish in the Europe service after the Spring Festival, and transport demand is dragged down. For the weak market condition, most box liners reduce repeatedly freight rate to lock market share, with the lowest even around USD200 per TEU. On Feb.19, freight index in the services from China to Europe and Mediterranean quote 795.34 points and 812.55 points, tumbling by 5.6% and 10.0% from one week ago respectively. It is said that part of box liners intend to push another round of freight rate increase plan in March.

In the North American route, transport demand tends to be sluggish, but the average slot utilizations in the USWC and USEC services remain to be around 80%. Fright rate competition becomes more stiffened, with some freight rate in the USWC service drops to be around USD900 per FEU, and the lowest one the USEC service below USD2000 per FEU. On Feb.19, freight rates in the services from Shanghai to USWC and USEC (covering seaborne surcharges) quote USD1070 per FEU and USD2074 per FEU, tumbling by 19.0% and 11.4% from one week ago respectively, both making the fresh low record this year.

Cargo volume continues to decline in the Persian Gulf service this week, most shipping companies reinforce to withdraw capacity temporarily, and the average space utilization rate fell to about 75%, with spot rate declining continuously. On Feb.19, freight rate in the Shanghai-Persian Gulf (covering seaborne surcharges) is USD 261/TEU, down by 5.4% from one week ago.

In the Australia/New Zealand route, cargo volume drops significantly. The imbalance between supply and demand continues to expand, and spot rate drops. On Feb.19, freight rate in this service (covering maritime surcharge) is USD440 /TEU, falling by 8.1% from last week.

In the South America routes, cargo volume declines further in the USEC service, with freight rate volatility on the lower level; cargo volume slip in the USWC service, where the average space utilization is about 85%, and spot rate falls to around USD600/TEU. On Feb.19, freight index in the China- South American routes was 406.20 points, tumbling by 12.0% over the previous period.

Cargo volume tumbles sharply in the Japan service, where the unbalanced demand/supply condition expands. On Feb.19, freight index in the China-Japan service quotes 643.86 points.

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