Demand Modestly Decreased

Ocean Shipping Rates Has Fallen Back on Average

This week, China's export container shipping market declined slightly, with major ports remaining in good operation and ocean liner market rates continuously falling back. On August 19, the Shanghai Export Containerized Freight Index released by the Shanghai Shipping Exchange was 3,429.83 points, declining 3.7% compared to the previous period.

European Routes: According to the latest data from Eurostat, retail sales in the eurozone fell by 1.3% in July compared to the same month last year. The inflation rate was 8.9% in July, exceeding the rate of 8.6% in June and marking a new record high. The COVID-19 was recurring again due to the emergence of new strains of Omicron, and the Russian-Ukrainian conflict was still ongoing. Rapid growth in inflation and an increase in the cost of living have weakened overall demand in the European economies. This week, the transportation market continued to fall, with the average space utilization rate of vessels in Shanghai port at around 90%. Some shipping companies continued to cut their rates to solicit cargoes, resulting in a decline in market rates. On August 19, the market freight rate (ocean freight and ocean freight surcharge) for export from Shanghai port to European basic port was US$4,788/TEU, declining 3.7% compared with the previous period. On the Mediterranean route, the market quotation was basically similar to that of the European routes. The average space utilization rate of vessels in Shanghai port was 85% to 90%, and the spot market booking price continued to decline. On August 19, the market freight rate (ocean freight and ocean freight surcharge) from Shanghai port to Mediterranean basic port was US$5,483/TEU, declining 2.7% compared with that in the previous period.

North American Routes: U.S. retail sales were flat in July in comparison to June. Meanwhile, the Federal Reserve was planning to keep raising interest rates aggressively, fueling market fears of a recession. On the demand side, it will take time to clear these additional stocks as domestic retailers in the U.S. have previously been too aggressive in replenishing their inventories. As August progressed, although the U.S. saw a back-to-school shopping rush, the boost in demand was limited to some cargo categories. Concurrently, as the vessel's permitted class rate improved and the congestion capacity was gradually released, the recent vessel loading rate has declined. The average space utilization rate of ships in Shanghai port is at 90% for the U.S. West routes and around 95% for the U.S. East routes. This week, the transportation demand fluctuated slightly, the supply and demand fundamentals of the U.S. West routes has declined. For the U.S. East routes, the market rates generally kept declining due to the recent "eastward shift" of many cargoes in support. On August 19, the market freight rates (ocean freight and ocean freight surcharge) for exports from Shanghai port to the basic ports in the western and eastern US were US$5,782/FEU and US$8,992/FEU respectively, declining 6.0% and 1.3% respectively compared to the previous period.

Persian Gulf Routes: The transportation demand was generally stable. This week, the average space utilization rate of vessels in Shanghai port was at around 80%. Recently, market quotations extended the weak performance, with spot booking prices continuing to fall. On August 19, the market freight rate (ocean freight and ocean freight surcharge) from Shanghai port to the basic port of Persian Gulf was US$2,231 /TEU, declining 5.9% compared with that in the previous period.

Australia-New Zealand Routes: The local outbreak continues to spread and the future is uncertain as key countries have lifted their preventive measures. The demand for all types of household goods in the destination market remained at a high level. The supply and demand fundamentals were basically stable, with spot booking prices declining slightly this week. On August 19, the market freight rate (ocean freight and ocean freight surcharge) for export from Shanghai port to Australia-New Zealand basic port was US$2,853/TEU, declining 1.7% compared with the previous period.

South American Routes: The market was nearing the end of the peak season with limited growth in transport demand and a lack of sufficient cargo support after several weeks of sharp increases. The average space utilization rate of vessels in Shanghai port slipped to 85%-90% from the previous full capacity. This week, the market rates experienced adjustments. On August 19, the market freight rate (ocean freight and ocean freight surcharge) for exports from Shanghai port to South American basic ports was US$8,965/TEU, a decline of 2.7% compared with that of the previous period.

Japan Routes: Despite of the recent serious local epidemic, the transportation market was generally stable; however, the market freight rates declined slightly. On August 19, the freight index of China export to Japan routes was 1,183.73 points.