Weekly Report of China Export Container Transport Market

(CCFI Commentary in Issue 32, 2012)

Weak Demand Caused Composite Indexes Fell Moderately

China export box market continued on the downward trend this week. Volumes in many oceangoing services were weak to grow, and the composite indexes slip further. On August 10, the China Containerized Freight Index (CCFI) and Shanghai Containerized Freight Index ( SCFI), issued by Shanghai Shipping Exchange (SSE), reported at 1,273.51 and 1,363.41 points, down by 0.8% and 0.4% from last week respectively.

In the Europe trade, affected by the depressed economy in the Euro zone, demand was not improved remarkably and continued to be weak despite in the traditional peak season. Although carriers began to limit capacity by canceling some voyages temporarily, the oversupply of capacity has not been changed reversely. The average slot utilization in this service hovered at around 85%. Furthermore, for the lack of insufficient cargo sources, carriers failed to raise spot freight rates in early August. Spot rates dropped this week after rebound in early August, with the present rate lower than the level before being raised. On August 10, the CCFI showed the freight index of this service marked at 1,831.36 points, down by 2.1％ month on month.

Volume was weaker in the Mediterranean service. The depressed consumption confidence of residents in the receipt place brought demand to fall further in the west- Mid, where the average slot utilization declined to around 80%, with spot rate decreasing ranged from $50 to $75 per TEU; Affected by many factors in the receipt place, such as Ramandan, geopolitical chaos, transport demand shrinked further in the east-Mid and North Africa services, where the average slot utilization kept at around 75%, and the spot freight rate fell in gerneral, ranging from $75 to $150 per TEU. On August 10, the CCFI showed the freight index of this service marked at 1,849.42 points, down by 9.4% compared with the same period last month.

Demand climbed up steadily in the North America service, where the average slot utilization kept above 90%, with some above 95%. Rates went in different trends. On one hand, encouraged by the improved situation of demand and supply, some carriers who had not lift rate began to raise rates, up by around $300/FEU in the USWC service and $500/FEU in the USEC service; on the other hand, in order to stable cargo sources, some carriers who had hiked rates began to decrease rates in some extent from $50 to $100 per FEU. On August 10, the CCFI, showing the freight rates (including freight and seaborne) in the USWC and USEC services, reported at $2,782 /FEU and $4,098 /FEU, down by 4.2% and 2.7% from last week respectively.

In the Australia and New Zealand service, volume declined firmly. Recently, carriers retrieved the control on capacity gradually, which led to the aveage slot utilization below 80% and rate down further. On August 10, the SCFI, showing the freight rate (including freight and seaborne) in this service, reported at $784/ TEU, down by 3.1% from last week.
volume was stable in the Persian Gulf service, where the average slot utilization kept at around 60%. Affected by the serious unbalanced situation of supply and demand, rate declined in a fast speed, with the lowest below $700/ TEU. On August 10, the CCFI, which showed the freight index of the Persian Gulf service, reported at 1,204.09 points, down by 9.1% weekly, or declined 16.9% monthly.

In the South America service, transport demand climbed up, as encouraged by the improved demand on traders in the emerging markets like Brazil. However, a large scale of capacity was added by carriers since July, which led to the unbalanced situation of supply and demand in a short time. The average slot utilization slip to around 85%, with rate falling further. On August 10, the SCFI, showing the freight rate ( including freight and seaborne ) , reduced by 2.4% against last week to1,926$/TEU.

In the Japan service, volume was stable this week, where the average slot utilization kept at around 75%. Rate declined slightly. On August 10, the CCFI, showing the freight index of this service, reported at 742.18 points, down by 0.6% from last week.