Spot rates tumbled on Asia-Europe and Transpacific trades; aggressive rate hike plans in December Asian liners with the largest capacity exposure to FE-Europe trade are Hanjin (c.36%), K-Line (c.34%) and HMM (c.34%). Asian liners with the largest capacity exposure to FE-US trade are NOL (c.42%), K-Line (c.41%), Hanjin (c.35%). Top OW: OOIL, K-Line. Top UW: CSCL, Hanjin.
Spot freight rates tumbled w/w: The Shanghai Export Container Freight Index (SCFI) fell 6% w/w for the week ending Nov 28. Spot rates fell 9% w/w on China-Europe routes to US$739/TEU (implying only 5% success versus a planned rate hike of $775-$900/TEU). Spot rates also fell 6% w/w on ChinaMed routes. Spot rates were also 12%/4% lower w/w on China-US West Coast and US East Coast routes at $1,905/FEU and $4,078/FEU (implying no success on China US WC routes and only 23% success on China-US EC routes vs their planned rate hike of $600/FEU). Intra-Asia spot rates were mixed. Spot rates were steady w/w on China-Taiwan/HK routes, fell 1%/2% w/w on ChinaKorea/SE Asia routes but rose 3% w/w on China-Japan routes. For longer trades, spot rates fell 1%/9%/9%/12% w/w on China-Persian Gulf & Red Sea/S Africa/Aus & NZ/South America routes but rose 1% w/w on China-E/W Africa. Bunker fuel prices fell 6% w/w.
Spot rates were also 5% lower y/y: China-Europe/Med rates fell 26%/14% while China-US WC and US EC rates rose 8%/36%. In Intra-Asia, rates fell 2%/5%/26%/40%/57% on China-Taiwan/Korea/HK/E Japan/W Japan routes but rose 5% y/y on China-SE Asia routes. For longer trades, rates fell 8%/21%/27% y/y on China-E/W Africa/Aus & NZ/S America routes but rose 12%/40% on China-S Africa/Persian Gulf & Red Sea routes. Bunker fuel prices fell 6% m/m, 26% y/y.
Congestion surcharges imposed on Asia-US WC routes postponed: Major liners had planned to implement congestion charges of $1,000/FEU on Asia-US WC routes from Nov 26 (previously from Nov 17) which has now been postponed again. Liners cited too much confusion in the industry, concerns raised by the Federal Maritime Commission and other groups and pushback from shippers as reasons for suspending the surcharges.
Recent news: 1) Maersk plans to raise Far East (excl Japan)-Med rates by $825/TEU from Dec 1. It also plans to raise Asia-Latin America rates by $750/TEU from Dec 15. 2) China Cosco plans to raise Asia-Latin America rates by $500-$750/TEU from Dec 15. 3) CMA CGM plans to raise Asia-West Africa rates by $300/TEU from Dec 1. 4) Liners in the Transpacific Stabilization Agreement plans to raise Asia-US rates by $1,000/FEU from Dec 15. 5) CMA CGM announced the acquisition of German short-sea shipping line OPDR to increase its market share in the fast-growing intra-European trade. OPDR operates a door-to-door logistics chain linking Northern Europe, including Scandinavia, Spain and Portugal, the Canary Islands and Morocco. 6) Contex charter rates were steady w/w, fell 1% m/m and rose 2% y/y. (source: Bloomberg, Alphaliner, JOC).
Stocks were mostly higher last week: NOL (+9% w/w), Wan Hai (+8%), Mitsui OSK (+7%) led while HMM (-5%), Hanjin (-1%), Samudera (flat) lagged.
Figure 1: SCFI Composite Index
Source: Shanghai Shipping Exchange.
Table 1: SCFI Summary
Route W/W Y/Y
SCFI Index 950 -6.2% -4.7%
Europe 739 -8.7% -26.1%
Med 952 -6.0% -14.1%
US WC 1,905 -11.7% 7.7%
US EC 4,078 -3.6% 35.7%
SE Asia 233 -2.1% 5.4%
Australia 747 -9.2% -20.7%
Source: Shanghai Shipping Exchange.
(Week ending Nov 28, 2014).
Figure 2: China-Europe Spot Freight Rates
Source: Shanghai Shipping Exchange.
Fig 3: China-US West Coast Spot Freight Rates
Source: Shanghai Shipping Exchange.
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