Weekly Report of China Export Container Transport Market

(CCFI Commentary in Issue 46, 2010)

This week, the China export containerized transport market continued going downhill, which revealed even obvious in Europe and America service, making the freight rate keep dropping. On November 19th, the China (Export) Containerized Freight Index issued by the Shanghai Shipping Exchange reported 1097.33 points, decline 0.9% from last week; while the Shanghai (Export) Containerized Freight Index saw 1189.71 points, with a week-on-week decrease of 2.5%.

In Europe service the cargo volume was still slumping, but part of the voyages saw mild bounce. Slot utilization for most of the voyages on the service were bolstered to 85% ~ 90%, where some even witnessed above 90%, while some of the Chinese manufacturers speeded up the delivery in order to consigned the shipments to the places of acceptance in Europe on the schedule of the last week before the Christmas. But, in general, the Europe service was still losing its equilibrium as the freight rate fell further. On November 19th, the freight index for the Europe and Mediterranean services issued by SSE reported 1565.48 points and 1626.57 points, respectively tumbled 0.9% and 1.0% from last week.

Pundits believe the cargo volume in November, the slack season conventionally, tends to shrink gradually and the entire markets will preserve the downward momentum in a short-term. But with the end-of-the-year shipment rush period is approaching, the rate for the voyages with fast-steaming is very likely to stabilize, while the voyages with slow-steaming is expected to face a promoted down turn.

In North America service, the cargo volume kept descending with no sign of rally, the slot utilization in US west coast service slipped to about 80% whereas in US east coast the figure hovered from 70% ~ 75%. The weak cargo volume strengthened the glut of the capacity, seriously pulling down the freight rate. On November 19th, the freight rate (ocean freight plus surcharges) for the voyages from Shanghai to base ports in US west coast and US east coast fixed at USD 2048/FEU and USD 3262/FEU, respectively down 3.0% and 3.3% from last week.

Recently, the growth of American economy slows down, capacity utilization remains low, residents raise their savings, and consumer confidence saw stagnated, all of the facts above may inflict on the transport demand on the North America service. Besides, here comes the conventional slack season and most consignees have had their stockpile restored, the balance of the supply-and-demand relation will be disrupted even tougher if capacity left surplus. It is understood that some carriers are prepared cutting the capacity in December to curb the downward freight rate.

In Australia and Singapore service, still, thanks to the Christmas shipment the capacity demand showed prosperous, where the slot utilization for most of the voyages reported no less than 95%, in addition, laden vessels were perceived increasingly often. The freight rate remained high due to the steady market. On November 19th, the freight index for the Australia and Singapore service issued by SSE reported 1040.85 points, almost no change with last week.

In Southeast Asia service, infected by the overabundant capacity in Europe and Mediterranean service, the recent slot supply showed increasingly abundant, with the demand kept sliding, so freight rate inclined to decrease week-by-week. On November 19th, the freight rate (ocean freight plus surcharges) for the voyages from Shanghai to base ports in Southeast Asia service quoted USD 213/TEU, down USD 34/TEU from last week.