Consolidation Market Weekly Report: Entering the peak season, freight rates fluctuate with ups and downs

This week, China's export container transportation market gradually entered the peak season, with overall transportation demand slightly increasing. Airline freight rates fluctuated due to different supply and demand fundamentals, and the composite index fluctuated slightly. On August 14th, the Shanghai Shipping Exchange released the China Export Container Freight Index, which was 819.62 points, an increase of 2.6% compared to the previous period; The comprehensive freight rate index for Shanghai's export containers was 745.60 points, a slight decrease of 0.5% compared to the previous period.
　　
European routes and the steady pace of economic recovery in the eurozone. According to the latest economic data released by Germany and France, the initial (annual) GDP values for the two countries in the second quarter were 1.6% and 1.1%, respectively, which is basically in line with expectations. The stable operation of the economy contributes to the stability of transportation demand. However, due to the overall overcapacity in the market, the demand gap is still significant. Although some airlines have implemented suspension plans, the effect is relatively limited. This week, the average utilization rate of Shanghai port ships on European and Mediterranean routes remained at around 85% and 90%, respectively. Under the strategy of airlines lowering prices to attract cargo, market freight rates continue to decline rapidly. On August 14th, the market freight rates (sea freight and sea freight surcharges) for Shanghai's exports to Europe and the Mediterranean were $640/TEU and $661/TEU, respectively, a decrease of 23.2% and 24.8% compared to the previous period.

According to the latest data, the retail sales of North American routes in July, adjusted for seasonal factors, were $446.5 billion, an increase of 2.4% year-on-year. The active consumption behavior benefits the market transportation demand, and the supply and demand relationship of air routes remains at a good level. The market freight rate trend is relatively stable. This week, the average utilization rate of ship space in Shanghai Port on the US West and US East routes remained above 95% and 90%, respectively. Given the strong market demand, most airlines are actively promoting the collection of mid month and peak season surcharges (PSS), with the increase concentrated at the level of $200-300/FEU. On August 14th, the freight indices for China's exports to the West and East Coast of the United States were 841.19 and 1131.83 points, respectively, an increase of 2.1% and 1.0% compared to the previous period.

The Persian Gulf route saw a slight increase in market volume due to the rebound in demand for replenishment in the receiving market after Ramadan. At the same time, some airlines have reduced their capacity, helping Shanghai Port's average utilization rate of ship space climb to around 85%. Given the favorable market trend, most airlines have started implementing mid month fare increase plans, with some airlines experiencing a second round of price increases within the month, resulting in a significant rebound in market fares. On August 14th, the market freight rate (including sea freight and sea freight surcharges) for Shanghai's exports to the basic port of the Persian Gulf was 613 US dollars per TEU, a significant increase of 21.6% compared to the previous period.

According to reports, the Australia New Zealand route has been affected by weak wage growth in Australia, high levels of idle labor in the job market, and declining trade levels, resulting in weak household consumption and dragging down the recovery of transportation demand in the market. Although some airlines have implemented irregular suspension measures, the overall improvement in supply and demand has had little effect. The average utilization rate of ship space in Shanghai Port is about 85%. Market freight rates have not stabilized. On August 14th, the freight rate index for China's exports to the Australia New Zealand route was 599.12 points, a decrease of 2.8% from the previous period.

On the Japanese route, the market cargo volume has slightly decreased, and the average utilization rate of ship space at Shanghai Port has not exceeded 60%. The market freight rates are basically stable. On August 14th, the freight rate index for Chinese exports to Japan was 614.80 points. (Source: Shanghai Shipping Exchange)