In the last year, the VCFI has doubled from 2,314.89 points in the fourth month of 2021 to 4,653.85 points in April 2022

The current economic situation, marked by extreme volatility, is affecting market behaviour and thus the supply-demand pairing for maritime transport

This month, there is less demand for maritime traffic due to the zero COVID-19 policy in Shanghai, the sanction packages against Russia and port congestion in various areas

The Western Mediterranean sub-index increases by 6.29% and the Far East increases by 3.58%

The Valencia Containerised Freight Index (VCFI) in April has increased by 5.09% compared to the previous month. In the last year, the Index has doubled from 2,314.89 points in the fourth month of 2021 to 4,653.85 points in April 2022. Compared to the beginning of the historical series in January 2018, the VCFI has accumulated a growth of 365.39%. The current economic situation, marked by extreme volatility, is affecting the behaviour of the market and, thus, the supply-demand pairing for maritime transport. In addition, it is worth noting the downward revisions in world economic growth, already predicted by some of the international reference organisations.

In this respect, the energy market situation has been marked by the war in Ukraine and the drop-in activity in China because of the restrictions imposed by the new outbreaks of COVID-19. Thus, the price of Brent crude oil has reversed its upward trend, decreasing by 5% compared to the previous month to $100.8. As far as marine fuels are concerned, according to the price of bunkering (refuelling of ships at sea) in the 20 main ports of the world, according to the data provided by Ship&Bunker, a certain containment is also observed. Thus, the price of VLSFO fuel has gone from 915.50$ in March to 924.50$ in April, representing an increase of only 0.98%.

As far as capacity on offer is concerned, and as noted by Alphaliner, the commercially inactive fleet has remained at a minimum. Thus, in mid-April, a total of 55 vessels were idle, with a total of 180,653 TEU (standard 20-foot container), representing 0.7% of the total active fleet, showing a drop with respect to March, with a total of 59 idle vessels and 204,977 TEU, representing 0.8% of the total active fleet.

As far as transport demand is concerned, there is less demand due to the fall in international trade. According to the latest data provided by the consulting firm Linerlytica, a significant decline in port traffic volume is observed compared to the previous month, mainly due to the fall in Chinese traffic due to closures because of the zero COVID-19 policy, which has severely affected port performance in Shanghai. At the same time, the impact on European port traffic due to the sanction packages against Russia, as well as the fall in confidence levels and consequently consumer consumption, remains a constant.

Another problem faced by the maritime industry and which has been present during the month of April is the high levels of port congestion. In this line, according to data provided by Linerlytica, global port congestion increased by 1.4% during April, with 3.4M TEU representing 13.4% of the total fleet. The main regions affected include North America (30%), North Asia (29%) and Northern Europe (11%). As is evident, the reasons behind these levels have been the pull of import demand from North America together with the closure of Chinese ports due to the new outbreak of COVID-19, which has doubled waiting times.

As for the analysis of the different areas that make up the VCFI, the increase is the general trend except for Latin America Atlantic, which has decreased by 0.94%. As far as increases are concerned, it is worth highlighting the increase in freight rates in the USA and Canada (9.82%), due to the boost in import demand, as well as East Coast Africa (8.14%), as a direct consequence of the serious flooding caused by heavy rains, which has forced port activity to come to a standstill, leading to the accumulation of large quantities of containers.

VCFI Western Mediterranean

As for the Western Mediterranean sub-index, an increase of 6.29% is observed with respect to the previous month, standing at 2,333.88 points, and accumulating a growth of 133.39% since the beginning of the series in 2018. However, and at the same time, about traffic from Valenciaport, there is a decrease in traffic to Morocco, Tunisia and Algeria compared to the previous month, a transitory situation, given the complex situation now.

VCFI Far East

In the Far East area and preceded by a decrease in the month of March, an increase of 3.58% is observed, reaching 3,771.91 points and thus accumulating a growth of 277.19% with respect to the beginning of the series in January 2018.In this line, a decrease in Valenciaport’s export flows with China, its main trading partner, stands out. Again, this could be a one-off situation given the current context, marked by the port congestion in the main Chinese ports, which is causing disruptions in transport and supply chains while also fuelling inflation.