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TRANSPORTCEO - 16/02/2018
The WCI increases by 25% compared to December due to the proximity of the Chinese New Year.
The dominant trend over the last few years has been for spot rates to increase in the weeks leading up to this Chinese holiday with a subsequent downturn as expected in 2018.
Spot rates continue to rise, as is customary, during the run-up to the Chinese New Year and from the beginning of January. This is due to factory closures during this holiday, so shippers choose to ship all goods in advance.
The benchmark rate for the World Container Index stood at $1,512 per 40-foot container on east-west trades last Thursday. WCI figures are 25% higher than at the end of 2017. This can be seen in the following table compiled by Drewry from WCI data on the dates closest to the Chinese New Year.
These are therefore key dates for the shipping industry, as the World Container Index tends to drop after the Chinese New Year. This happened, for example, in 2016, the year of the monkey when, after a growth of 24% in the dates prior to this holiday, the subsequent decline was 41%.
This tonic has been reproducing in a similar way since the year of the snake in 2013 with increasingly pronounced falls after the Chinese New Year. It is necessary to go back to 2012, the year of the dragon to observe a change in dynamics. In that year, after having experienced a growth of 25% in previous dates, after the Chinese New Year, the WCI rose 34% more.
Forecast 2018 Drewry uses the Practical Market Index, which is based on supply and demand in the market, and as a result both were remarkably balanced in 2012 thanks to large capacity adjustments. On the other hand, the worst performing years show an imbalance between supply and demand.
According to what we can see in the graph, 2018 does not hold too high a hope that the WCI will record good data. However, Drewry predicts that this year's effects will be similar to those of 2016.
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