Fundación Valenciaport

The Valencia Containerised Freight Index (VCFI) registered an increase of 6.59% in September over the previous month, reaching 2,097.74 points. This result represents a cumulative growth of 109.77% since the beginning of the series in 2018. As regards the Western Mediterranean sub-index, it has experienced an increase of 9.31% over the previous month, standing at 2,337.69 points and accumulating a growth of 133.77% since the beginning of the series in 2018. For its part, the Far East area recorded a fall of 9.49%, standing at 1,997.89 points, showing a cumulative increase of 99.79% since the start of the series in January 2018.

In an environment marked by geopolitical tensions and economic uncertainty, the shipping industry continues to face challenges that affect trade routes and raise operating costs. According to the International Monetary Fund (IMF), global growth is projected at 3.2% by 2024 and 3.3% by 2025, but inflationary pressures, especially in the services sector, are complicating disinflation and making monetary policy normalization more difficult. This increases the risk of persistent inflation and higher interest rates for an extended period, amid rising trade tensions.

Against this backdrop of uncertainty, there have been mixed performances in global trade. In September, the euro zone’s private sector showed its first decline in seven months, as measured by the Purchasing Managers’ Index (PMI), an economic indicator that measures activity in the manufacturing and services sectors. This index fell to 48.9 points, indicating contraction. A value below 50 points reflects a decline in economic activity, and this decline signals a slowdown in both sectors, suggesting a significant drop in demand, reduced orders and lower business confidence. This contraction in the euro zone economy is a reflection of global economic uncertainty.

In terms of maritime traffic, the seasonally adjusted RWI/ISL container throughput index showed a moderate improvement in global traffic, rising to 134.4 points in September. Chinese ports experienced slight growth, from 146.5 to 149.7 points, while Europe saw a sharper recovery after the drop in July. The North Range Index, which measures activity at ports in northern Europe and Germany, rose from 111.7 to 114.1 points in September, suggesting a slight improvement after several months of fluctuations. However, this recovery in European port traffic contrasts with the broader contraction of the economy in the region. In this context, it is important to consider the seasonality of the timing, as the imminent arrival of Golden Week in China may be leading to an anticipation of orders from importers and thus inflating demand for shipping.

In terms of shipping supply, September saw a significant contraction in the inactive cargo vessel fleet, which reached only 0.5% of the overall container fleet capacity, according to Alphaliner. As of September 9, the total number of inactive vessels was down to 58 vessels, with a capacity of 156,548 TEU, following the reactivation of twelve vessels representing 5,572 TEU.

This level of idling is the lowest since May and only the second time since the start of the pandemic that a rate of 0.5% or less has been recorded. The reduction in idling has been observed across all vessel categories, although the 3,000-5,100 TEU and 18,000 TEU segments showed no change. Most of the vessels that returned to service belonged to the 5,100-7,500 TEU category, while the remainder were mainly concentrated in the less than 3,000 TEU fleet.

Additionally, the number of vessels “in yard” also contracted slightly in the last two weeks, with a net reduction of three vessels totaling 44,381 TEU. Overall, inactive vessels and those in yards now represent only 2.4% of the total fleet, down from 2.8% previously.

In the energy and commodities market, the average price of Brent crude oil fell in September to $74.02 per barrel, compared to the $80.36 recorded in August, representing a 7.9% decrease. Similarly, in the marine fuel market, the cost of bunkering in the top 20 global ports, according to data provided by Ship&Bunker, also showed a 3.9% decline in the price of VLSFO (Very Low Sulphur Fuel Oil), which fell from $620 in August to $596.09 in September.

With all this, tonnage supply remains tight due to continued vessel detour around Africa, persistent congestion at some key ports and an anticipated peak season with higher than expected cargo demand. Although there has been a significant increase in the number of new vessels, the balance between supply and demand has not yet been fully restored. This phenomenon suggests that the global liner fleet is ‘fully employed’, reflecting a recovery in the shipping sector despite the global tensions and logistical challenges that persist.

However, the deterioration in the Purchasing Managers’ Index (PMI) indicates that European economies, especially in the Eurozone, face structural challenges that could impact trade and shipping in the coming months. Although container movement is showing signs of recovery in some regions, the overall picture remains uncertain. Inflationary tensions, trade disruptions and geopolitical pressures continue to influence global shipping and trade, suggesting that challenges for the industry are persistent despite signs of improvement in port traffic.

Looking ahead to the coming weeks, it is relevant to note again, the fact that, the impending arrival of Golden Week in Asia in early October, during which factories close and demand for container shipments to and from Asia is reduced, could lead shipping lines to consider the option of cancelling some of their voyages. This adjustment in capacity anticipates the expected decline in demand, adding a new level of uncertainty to the industry.