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China Sourcing Update: Transportation Cost (Aug 2017)

China Containerized Freight Index declines in August

The China Containerized Freight Index (CCFI) fell from 874.38 on 28 July to 846.73 on 25 August (see exhibit 1).

The main reasons for the drop in the price index were a serious overcapacity problem among carriers on the Persian Gulf / Red Sea and a slump in the market demand for West African routes, which led to a plunge in the container freight rates for these routes in the month. Meanwhile, freight rates for European and North American routes stayed high as market demand remained robust.

In our view, the demand for containerized freight services for European and North American routes is expected to stay stable; meanwhile, the freight rates for the Persian Gulf / Red Sea routes and West African routes are likely to fall further. All in all, we believe that the China Containerized Freight Index will continue to trend downward in the near term.


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Content provided by Fung Business Intelligence
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