The Valencia Containerised Freight Index (VCFI) recorded a 13.1% drop in December 2022 compared to November, marking the fourth consecutive month of decline.
The index stood at 3,603.07 points, showing a 260.31% growth since its inception in 2018 but falling below 4,000 points for the first time since November 2021.
Regional Trends in Freight Rates
- Central America and the Caribbean:
- Largest decline, at -22.61%.
- Latin America Pacific:
- Dropped by -17.37%.
- USA and Canada:
- Decreased by -13.09%.
- Western Mediterranean:
- Fell by -11.43%, with export volumes to Morocco, Tunisia, and Algeria notably affected.
- Accumulated growth: 89.79% since 2018.
- Impacted by Spain’s strained trade relations with Algeria due to political disputes.
- Far East:
- Declined by -7.51%, with congestion levels exacerbated by COVID-19 outbreaks in Chinese ports like Shanghai, Ningbo, and Qingdao.
Factors Influencing the Decline
- Demand Uncertainty:
- Global trade activity has slowed, with the WTO’s Goods Trade Barometer dropping to 98.3 points.
- High inflation has dampened consumer spending, leading to reduced export demand.
- Supply Challenges:
- The idle fleet increased to 93 vessels (581,677 TEU) in December, representing 2.2% of the total fleet.
- Port congestion remains significant, especially in North Asia (37%), North America (16%), and Northern Europe (10%).
- Energy and Fuel Trends:
- Brent crude oil prices averaged $80.92 in December, down from $91.42 in November.
- VLSFO fuel prices fell by 9.2%, from $712.8 in November to $646.9 in December.
Despite the drop in freight costs, Valenciaport continues to navigate challenges posed by global economic uncertainty, supply chain disruptions, and geopolitical tensions. The decreasing congestion and fuel costs provide some optimism, but pre-pandemic levels remain a distant goal.
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Source: VALENCIA PORT
