The Valencia Containerized Freight Index grows 17,48% in March

It stands at 1.971,96 points

Particularly noteworthy is the increase in freight rates in Latin America Pacific (45,68%), Central America and the Caribbean (40,08%), the United States and Canada (23,17%) and the Eastern Mediterranean (14,99%).

---

El Valencia Containerized FreightIndex (VCFI) registered an increase of 17,48% in March compared to the previous month and stands at 1.971,96 points, the highest figure since the beginning of the historical series in January 2018. The growth in freight rates occurs in all geographic areas analyzed by the VCFI except in two (Atlantic Europe and Baltic Countries). The price of fuel, congestion on the main routes in the East and West, the shortage of empty containers and the forecast of strong cargo demand for maritime traffic in the coming months are factors that have influenced the growth of the index.

 

 

From a demand point of view, since December 2020 it seems that the growth of global port traffic has stabilized and in February it remains practically at the same levels as the previous month, according to the latest data published by RWI/ISL what does the Leibniz Institute for Economic Research. However, if we take as reference the latest data from Valenciaport, a strong demand for export traffic (full containers) is observed, which experienced strong growth in February compared to January and are at levels much higher than those of the same period of the previous year.

 

For its part, from the perspective of supply, the inactive fleet stood at 2,6% in mid-March while the idle fleet for commercial reasons reached 1,1%. According to Alphaliner, this data corresponds to maritime operators' forecasts of strong cargo demand for the coming months, particularly in the period prior to the next high summer season. Shipping lines also expect current port congestion issues on major Eastern and Western routes to persist into the summer months, further stretching already tight supply of capacity and helping to keep the idle fleet at low levels.

 

Another determining aspect of freight fluctuations is the price of oil. In March, the average value of a barrel of Brent European currency stood at $65,41 per unit, 5,03% more than the previous month, continuing the growing trend of recent months. Bunkering prices -refueling of ships at sea- in March have shown uneven behavior. Thus, in the first half of the month the cost of IFO 380 (Intermediate Fuel Oil) and VLSFO (Very Low Sulfur Fuel Oil) The increasing trend continued, while in the second fortnight prices suffered a slight decrease.

 

With regard to geographical areas, the growth of Pacific Latin America (45,68%), Central America and Caribbean (40,08%), U.S. and Canada (23,17%) and Eastern Mediterranean (14,99%). According to the latest traffic data from Valenciaport, export containers to these areas have experienced intense growth in February (latest data available), which may be putting upward pressure on freight rates with these areas. To this we must add that the shortage of containers and congestion on some routes continues.

 

 

The price of fuel, the shortage of empty containers or congestion on the main routes are factors that have influenced the growth of the Index

 

 

In this sense, it is necessary to point out the case of United States where stagnation problems persist in some of its main ports, causing negative effects on import chains. Furthermore, it must be added that spending on goods has experienced positive growth since June 2020, this being the driving force behind the demand boom. An increase that continues in 2021, which suggests that the increase in demand for goods in the US will accelerate, thus continuing the challenge that this represents for import logistics chains.

 

VCFI Western Mediterranean

 

El Sub-index with the Western Mediterranean It grew again by 19,74%, reaching 1.459, 51 points. In this way, it has now chained four consecutive months of strong increases, accumulating 45,95% since the beginning of the series in January 2018. It must be reflected that the behavior of exports from Valenciaport with these markets remains positive, although in The last month was more moderate. On the other hand, the global context of a shortage of empty containers and the difficulty in finding slots on ships continue to be the prevailing trend, which may be greatly influencing freight rates in this area.

 

VCFI Far East

 

As to Far East sub-index, in March it once again experienced strong growth of 8,05% and has already had eight consecutive months of growth, reaching 3.180,31 points. Beyond the global problems in the maritime transport market that seem to be affecting most areas, it should also be noted that export traffic from Valenciaport with the markets belonging to this area grew intensely in February. Thus, this greater demand may also be putting pressure on freight rates to these destinations.