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Valencia Containerised Freight Index (VCFI) Stabilises Its Growth With An Increase Of 4.14% In December

Valencia Containerised Freight Index (VCFI) stabilises its growth with an increase of 4.14% in December

València, January 14, 2022 – The Valencia Containerised Freight Index (VCFI), the indicator that measures the trend and evolution of container transport costs by sea from the Port of Valencia, closed the year with a 4.14% increase in December compared to the previous month. This rise continues the trend of the last five months of the year, where the monthly increases have been more moderate
than in the January-July period.  Thus, the VCFI has reached a value of 4,063.59 points at the close of 2021, accumulating an increase of 185.5% compared to December 2020, while since the beginning of the series in January 2018 the increase has been 306.36%. The high demand for port traffic, the price of marine fuel and congestion in some US precincts have marked the end of 2021. The VCFI rises in all geographical areas, except for Atlantic Europe, among which the increase of 1.21% in the Western Mediterranean and 2.95% in the Far East stand out. For yet another month, the demand for products and services continues with the same growing trend as in previous months, which is reflected in maritime transport, which has experienced an increase in its levels, mainly due to the growth of traffic in Chinese ports. In fact, this strong boost in demand, especially in US containerised import traffics, except for motor vehicles and their parts due to the semiconductor crisis, is having a direct impact on global maritime activity.  Against this backdrop, shipping lines are using all available vessels so that the commercially idle fleet continues to be kept to a minimum. Thus, in mid-December, data provided by Alphaliner counted 48 inactive containerships with 149,386 TEU representing 0.6% of the total active units, showing a slight decrease from November’s level of 164,540 TEU of idle fleet. Another key aspect when it comes to understanding the evolution of freight rates due to their direct influence on the operating costs of shipping lines is the price of fuel. Thus, according to data provided by Ship&Bunker on the cost of bunkering (refuelling of ships at sea) in the 20 main ports of the world, the average price of IFO 380 (Intermediate Fuel Oil) stood at $480.50 in December compared to $455.50 the previous month, which represents an increase of 5.48%. Similarly, VLSFO (Very Low Sulphur Fuel Oil) has increased by 8.18%, since in November the value was at $585.50 per tonne, while in December it reached $633.50. As for the analysis of the different areas that make up the VCFI, growth has been the general trend in all areas except for Atlantic Europe, whose freight rates have decreased by 10.78% compared to November. The largest increases in the Index occurred in Africa East Coast (10.70%), Latin America Pacific (8.23%), Baltic States (7.78%), USA & Canada (5.31%) and Central America & Caribbean (4.59%). In addition to the above-mentioned factors, port congestion continues to play a role in this increase in the VCFI in most areas. In this respect, the figures offered by the Marine Exchange Southern California indicate that in mid-December, 101 container vessels were held up in the ports of Los Angeles-Long Beach. VCFI Western Mediterranean Regarding the Western Mediterranean sub-index in the month of December, the VCFI reflects an increase of 1.21% over the previous month, standing at 2,117.25 points and accumulating a growth of 111.73% since the beginning of the series in 2018. In this area, it is worth highlighting the continued increase in traffics from Valenciaport to Morocco, which are even above the levels reached in 2019 and 2020. Similarly, export figures from Valenciaport to Tunisia have increased in the last month, also exceeding the values of previous years. On the other hand, traffic from the Valencian precinct to Algeria has decreased during the last month, reaching a lower level than in previous years. VCFI Far East In the Far East area, there was an increase of 2.94% to 3,742.98 points. The VCFI with this area has risen by 274.30% since January 2018. In this rise, in addition to the factors common to the rest of the regions, Valenciaport’s traffic with the countries in this area should also be noted. In this regard, it is worth highlighting an increase in Valenciaport’s export flows with China, the main trading partner and the most important market in the Far East. In this last period of the year, the behaviour of the demand for goods has been decisive, which has a clearly seasonal component, marked by the Christmas festivities and the proximity of the Chinese New Year, a date of special importance due to its direct influence on the dynamism of international trade. Source: Autoridad Portuaria de València (APV – Valenciaport, Port Authority of Valencia)

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