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The VCFI is the index created by the Port Authority of Valencia to reflect the evolution of the market rates for the export of full containers by sea from Valenciaport. VCFI stands for Valencia Containerised Freight Index. This index will serve shippers as a tool to predict the evolution of freight rates within their markets of interest, which is a key determinant of the cost of their export operations. On the other hand, it will also be useful for operators that offer such services, providing a benchmark for the evolution of their own freight rates and those on the market.

VCFI General

VCFI August 2021

The Valencia Containerised Freight Index (VCFI) for the month of August stood at 3,513.54 points and showed a slower rate of growth than in previous months, increasing at a rate of 2.51%. Thus, it is now thirteen months of upward trend in export freight rates from Valenciaport, accumulating a growth of 251.74% since the beginning of the series in January 2018. In this context, for yet another month the evolution of freight rates in most areas is moving in an upward direction, except in the Baltic States and Atlantic Europe, which remain constant.

The dynamism of supply-demand in maritime transport continues to be the key factor in explaining the growing behaviour of freight rates over the last few months. On the demand side, it is worth highlighting the latest data published by the Good Trade Barometer of the World Trade Organization (WTO), which has obtained its highest value since its first publication in 2016, a fact that evidences the dynamism of international trade. As a direct consequence of the high demand for goods to be transported, the volume of TEUs handled by the world’s main ports increased in August, as shown by the RWI/ISL-Container Throughput Index prepared by the Institute of Shipping Economics and Logistics (ILS), which collects data from 91 ports representing 60% of total container traffic.

On the other hand, according to data obtained by Alphaliner, the fleet idle for strictly commercial reasons remains at minimal levels compared to previous years for the same period. Thus, 48 idle vessels with a total of 174,588 TEUs are observed, representing 0.7% of the total active fleet and showing an almost imperceptible increase with respect to the level of idle fleet existing at the end of July with 161,821 TEUs, although also representing 0.7% with respect to the existing active fleet. In this respect, it is worth taking into account the fact that most of the existing low rate of commercial idleness has only occurred for unavoidable operational reasons and is therefore of short duration.

As far as fuel prices are concerned, mixed trends can be observed. In this respect, the average price of a barrel of European Brent crude oil decreased by 6.07% in August compared with the previous month, from $75.17 in July to $70.16 in August. With regard to the price of bunkering – the refuelling of ships at sea – in the 20 main ports of the world and according to the data offered by Ship&Bunker, the average price of IFO 380 (Intermediate Fuel Oil) has gone from $448 in July to $449.50 in August, which represents an increase of 0.34%. On the other hand, VLSFO (Very Low Sulphur Fuel Oil) decreased by 3.13% from $559.50 in July to $542 per tonne in August.

With regard to the analysis by area, it should be noted that, although in August the intensity of freight growth eased in most areas, upward pressure continues to be the dominant trend in all of them. Among them, the growth experienced in Africa East Coast (10.05%), Indian Subcontinent (8.77%) or Latin America Pacific (5.68) can be highlighted. As has been pointed out, a scenario of congestion is once again taking place in many ports, a phenomenon which, beyond occurring in any one port or country, is becoming globalised. As the shipping market continues to operate at near 100% utilisation levels for much of the year, supply chains are overstretched and even minor operational problems, such as small accidents and mishaps, are not only a problem in many ports, but also in the ports themselves.

small accidents and mishaps, can spiral out of control and have huge repercussions. As for the United States, ships are again piling up in the Californian ports of Los Angeles and Long Beach and, to a lesser extent, in Oakland. In fact, in the last week of August, the number of container ships waiting in San Pedro Bay reached 28 units, whilst seven ships are waiting in San Francisco Bay to berth in Oakland. In Europe, meanwhile, the situation is less evident, but many of the major transhipment ports are also congested, as strong cargo demand, reduced labour from summer holidays and COVID-19 restrictions, and prolonged container dwell times combine to wreak havoc on overall terminal throughput.

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VCFI Participating Companies

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