This increase continues the trend of the last five months of the year, where monthly increases have been more moderate than in the January-July period
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.