Transport & Logistics mode

Shanghai/Valencia: marked drop in ocean freight rates

September 18 2019

Ocean freight rates between Shanghai and Valencia have fallen significantly, showing that there is neither pressure on space nor a pre-Golden Week rush at this point.

From October  1 to 7, China will be operating at Golden Week pace. This annual event, which celebrates the birth of the People's Republic of China, creates a clear lull in activity which prompts shippers sometimes to bring their deliveries forward. This year, however, this effect is not strong enough to push up freight rates, as the Shanghai-Valencia line demonstrates. Clearly, available space is still largely sufficient.

shanghai_valence

Source : Upply Historical View

The companies' response to market conditions is taking the form of sometimes late cancellations of ships' departures and general increases in rates.

The downward trend is being felt throughout the Asia-West Med range (Genoa, Fos, Barcelona and Valencia).

Valencia's rise to prominence

The Spanish port of Valencia, which was still an optional call 10 years ago compared to Barcelona, is today an indispensable port of call on each rotation. It is a great contributor to the development of all the Madrid zone and southern Spain. Its modern configuration makes it better adapted to high volume container traffic than Barcelona.

valence-barcelone

Source: Barcelona and Valencia port statistics, Upply

Retail logistics, notably, which is an import locomotive, has a marked preference for the Valencia zone for unloading for reasons of cost and also because of the proximity of logistics platforms.

Exports out of Valencia are still in deficit, however, particularly since tighter restrictions were introduced in China on waste shipments.

Business operators continue to be confident about the zone with a PMI composite activity index of 52.6 for Spain which has been at a high level for the last four months.

Captain Upply, with David Thébault

Photo : @ Puerto de Valencia

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Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).