The Shanghai Containerized Freight Index (SCFI) put a strong weekly reversal to end at 979 points, an appreciation of 5.1% on a weekly basis. Incidentally, this is only the second occasion where the index has registered a 5% weekly increase in rates over the past 26 months.
Its Shanghai Shipping Exchange counterpart the Chinese Containerized Freight Index (CCFI) had no such touchwood moment though, shedding further to 869.9 points on the back of yet another weekly depreciation of 1.17%, led by trade lanes from Korea, Europe and the Red Sea.
While the index is at its lowest in three years- the fact that it has outperformed the spot-based SCFI and other indices, and the lowering contract market possibly calls for the weakening here.
Meanwhile, Drewry’s World Container Index which had hit levels last seen in November 2019, displayed a momentary comeback with spot rates supposedly improving to US$1,488 from US$1,474, last week. The transatlantic rates routed further by 12% to end at US$1,769 and for the first time since 11 August 2022 ended back lower than the transpacific counterparts- China-US West Coast.
The latter extended their resurgent showing putting a 9% increase and an appreciation of US$210 in just a fortnight. The bigger peer, China-US East Coast too extended a 5% gain to end at US$2,715, as other rates ended in the reddish territory for the week.
It’s interesting to see that the Composite Index has been buoyed in the short-term by the China-US rates signifying the importance of their weightage in the overall index. However, this does not confirm, if the bottom has been found yet. While economic data in the US has been improving, China hasn’t lived up to the expectations built for its scenario in the second half of 2023.
Author of the article: Gautham Krishnan
Gautham Krishnan is a logistics professional with Fluor Corporation, in the area of project logistics and analytics, and has worked in the areas of Project Management, Business Development and Government Consulting.