March has passed, and the small peak of pre-holiday shipments expected by the marine container market has not arrived as scheduled, and in the market environment of weak economies in developed countries and abundant market capacity, the peak season factors for container transportation are gradually fading. Market participants believe that the fundamental factor affecting the container transportation market is still the contradiction of excess capacity. Idle capacity and slowing down of new capacity have become a top priority in the current market, especially as the peak season is coming to an end, and it is especially important that container transportation is about to shift to the traditional off-season.

On September 30, the China Export Container Comprehensive Freight Index released by the Shanghai Aviation Exchange closed at 976 points, a decrease of 1.7% from the previous month, including: 804 points on the Japanese line, down 0.2%; and 1067 points on the European line, down 2.6%; The US West Route was 887 points, down 4.8%; the US East Route was 1,178 points, down 4%.

Moreover, it is worth noting that the container space loading rate continued to decline in September, and some of the routes with relatively high space utilization in the early stage also began to decline. Among them, the Mediterranean and US East routes declined significantly, from 95% last month to the end of September. 90%, or even lower, of the strong freight rate; the European route's space utilization is still less than 90%, while the US West route has dropped to about 80% on average.

Insufficient loading rate has caused the market to continue to slump. In September, China’s container export freight index hit a new low during the year. The container freight rates of 15 routes in Shanghai Port turned green across the board. Among them, the European route, the busiest route in the world, was the most tragic. Overcapacity, it fell below US$800/TEU for the first time in the year, and the lowest freight rate once broke a low of US$650/TEU.

According to agency calculations, after removing the fuel surcharge, the basic freight rates of the routes from Asia to Northern Europe in the past two months were lower than those during the economic crisis in 2009, and liner company operations have become unsustainable. At the same time, life on the North American route is not easy, and it has fallen for four consecutive weeks. The US$400/feu peak season surcharge recommended by the Pan Pacific Freight Stabilization Agreement organization has basically been in vain.

Senior shipping expert Chen Yi said that the absence of the current peak season means the arrival of the off-season, and it is inevitable to increase idle capacity.

According to data, in early June, there were only 63 ships with 80,000 TEUs in the world. This is the lowest number of idle ships since August 2008, that is, on the eve of the financial crisis, but by the beginning of September this year, this number has increased to 100 ships and approximately 211,000. TEU, with an increase of 131,000 TEU in three months, the idle capacity has shown a monthly upward trend.

The data shows that the export order index in the 9 China (PMI) sub-data is 50.9%, which is above the threshold, an increase of 2.6 percentage points from the previous month, but still lower than the historical level of the same period.

Chen Yi said that despite the recent adverse factors such as the European debt crisis and the increasing risk of the global economic downturn, the volume of foreign orders for China’s manufacturing industry has still increased, indicating that the current export growth momentum has not been fundamentally changed, affecting the container transportation market. The fundamental factor is still the contradiction of excess capacity. Idle capacity and slowing down of new capacity have become a top priority in the current market, especially as the peak season is coming to an end, and it is especially important that container transportation is about to shift to the traditional off-season.

Source: Economic Observer Network