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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 July 2022

The Valencia Containerised Freight Index for the month of July stood at 4,866.15 points, representing a monthly increase of 2.5% and accumulated growth since the start of the series in 2018 of 386.6%. This historic rise in the value of the index is unevenly distributed over the time horizon of the data, as well as in the different geographical areas that make up the index. Indeed, and as a result of the high levels of connectivity of the Port of Valencia, the VCFI is made up of maritime export prices to ports located in thirteen different geographical areas, some fully integrated in the major maritime routes and others with a much more local character, but also of importance in the traffic mix of Valenciaport. This diversification of destinations and traffic can lead to a certain asynchrony in the movement of prices in certain areas compared to others.

With regard to the maritime situation and with regard to supply, and with regard to the energy and raw materials markets and the last financial year, in July the average price of a barrel of Brent crude oil was $111.93, compared to $122.71 in June, which implies a decrease of 8.78%. Similarly, marine fuels in general have fluctuated downwards. For this purpose, the bunkering price of the world’s top 20 ports has been considered, based on data provided by Ship&Bunker. As a result, the VLSFO bunker price has fallen from $ 1077.50 in June to $ 914.50 in July, representing a decrease of 15.1%.

In the same vein, and in terms of capacity on offer, Alphaliner data show a drop in idle fleet levels compared to the previous month. As a result, 63 vessels were idle in mid-July, totalling 218,222 TEUs, representing 0.9% of the total active fleet. This is still a low percentage of idle vessels, however, it represents an increase compared to 2021, when the average idle fleet represented 2.5% of the total fleet.
As far as demand is concerned, at the beginning of July the World Trade Organisation (WTO) highlighted the increase in world trade so far this year, although a slowdown in the rate of growth of this has been observed, given the evolution in the Asia-Pacific area, as pointed out by UNCTAD. The outlook for the last part of the year looks complex with the threats that are threatening most developed economies and which may have clear effects on foreign trade.

However, and at the same time, as far as port traffic volume is concerned, according to the latest data provided by Container Trade Statistics, the global volume of TEUs has increased. More specifically, and as pointed out by the RWI-ISL Container Throughput Index, this has been mainly due to the normalisation of activity in the Port of Shanghai, which has led to an increase in the demand for containers. On the other hand, as far as Europe is concerned, global trade volumes continue to suffer, due both to the disruptions in supply chains in recent months and to the restrictions on trade with Russia, which have had a noticeable effect. Similarly, as noted by SeaIntelligence, it is worth noting the slowdown in US demand for durable goods, which, compared to last year, has been contracting at a year-on-year rate of 6-10%. With this, it can clearly be said that the unprecedented strength of US durable goods consumption is losing momentum, heading towards a gradual return to pre-pandemic levels.

As far as congestion levels are concerned, the clear downward trend of previous months continues, without yet reaching pre-pandemic average levels. World port congestion was slightly reduced in the last weeks of July, with improvements in China offset by worsening delays in North American ports – where protests by truck, rail and port workers are pressing their respective causes – while there is no significant change in the situation in Europe. In this respect, North American ports remain the most critical congestion hotspot, with 39% of global congestion, while North Asia’s share decreased from 24% to 20%, while Northern European and Mediterranean ports increased marginally from 19% to 20%. The other regions remain stable with no change in the congestion situation.

In the same vein, the figures on schedule reliability published by Sea-Intelligence in the Global Liner Performance (GLP) report follow the same upward trend observed in 2021. However, the current year shows slightly better data, as the first figures for 2022 were below the previous year’s level. In this sense, today the global figure for ship delays is below 7 days.

With regard to the different areas that make up the VCFI, once again highlighting the disparity of behaviour mentioned at the beginning, the increase in the East Coast Africa area (9.87%) due to the floods that have hit the Port of Durban stands out. The increase in the area of Central America and the Caribbean and the USA and Canada is also noteworthy, given the high levels of existing congestion, among others. At the same time, significant falls in freight rates were observed in Africa West Coast (-6.41%), the Middle East and the Indian Subcontinent.

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VCFI Participating Companies

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