Declines in the Export Market Slow Down
Shipping Rates Fall on Most Routes
This week, the market conditions for China's export container transport failed to recover and the transport demand stayed sluggish, with most ocean shipping market rates going further downwards; however, the overall decline in the export market slowed down. On October 21, the Shanghai Export Containerized Freight Index released by the Shanghai Shipping Exchange was 1778.69 points, declining 1.9% compared to the previous period.
European Routes: According to data released by Eurostat, the final value of the Eurozone's reconciled CPI rose to 9.9% in September compared to last month, which was the highest level on record. The huge inflation pressure forced the European Central Bank to tighten up, which resulted in a further slowdown in the European economic growth that was already rather weak. Recently, the manufacturing data in Europe has fallen below the PMI. As the winter season approaches, the ongoing Russia-Ukraine conflict will bring Europe to face a further test against the energy crisis. This will worsen the inflation situation, which is already at an all-time high, and expose the economy to the risk of falling into recession in the future. Transport demand continued to show signs of weakness after the National Day holiday, with market rates lasting on a downward trend. On October 21, the market freight rate (ocean freight and ocean freight surcharge) for export from Shanghai port to European basic port was US$2,379/TEU, declining 7.8% compared with the previous period. For Mediterranean routes, market quotations were largely in sync with European routes, but the spot market booking prices continued to fall as the relationship between supply and demand stayed unfavorable. On October 21, the market freight rate (ocean freight and ocean freight surcharge) from Shanghai port to Mediterranean basic port was US$2,568/TEU, declining 6.5% compared with the previous period.
North American Routes: According to data released by the US Department of Commerce, US retail sales were flat in September month-on-month, a decline of 0.3% from the previous value. The downturn in retail sales indicates that consumers are increasingly prudent in purchasing non-essential goods in the toughest inflation environment in decades.The slowdown in consumption and employment, alongside the aggressive interest rate hikes taken by the Federal Reserve to curb inflation, is continually magnifying the risk of the US economy descending into stagflation. The transportation market recovered slowly after the holiday season and transportation demand underperformed, which resulted in the unstable supply and demand fundamentals. Market freight rates saw a continued adjustment trend, but the rate of decline began to slow down. On October 21, 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$2,029/FEU and US$5,639/FEU respectively, declining 3.2% and 3.0% respectively compared to the previous period.
Persian Gulf Routes:The volume of cargoes was generally stable after the holiday. The partial suspension of capacity in the previous period improved the supply and demand fundamentals and the spot booking prices proceeded to rebound this week. On October 21, the market freight rate (ocean freight and ocean freight surcharge) from Shanghai port to the basic port of Persian Gulf was US$1,451/TEU, a rise of 23.9% compared with that in the previous period.
Australia and New Zealand Routes: There was a lack of further growth in demand for all types of household goods in the local market. The recovery in transport demand after the holidays was moderate, with a poor supply-demand relationship, as the market rates moved on to the downside this week. On October 21, the market freight rate (ocean freight and ocean freight surcharge) for export from Shanghai port to Australia-New Zealand basic port was US$1,498/TEU, declining 4.0% compared with the previous period.
South American Routes: Transportation demand experienced sluggish growth and the supply-demand balance was not satisfactory, with a slight drop in spot market booking prices this week.On October 21, the market freight rate (ocean freight and ocean freight surcharge) for exports from Shanghai port to South American basic ports was US$5,059/TEU, a decline of 1.2% compared with that of the previous period.
Japan Routes: The transportation market was generally steady, with market rates declining slightly. On September 21, the freight index of China export to Japan routes was 1,151.58 points.