The VCFI is the index created by the Port Authority of Valencia to reflect the evolution of the market rates for the export of full containers by sea from Valenciaport. VCFI stands for Valencia Containerised Freight Index. This index will serve shippers as a tool to predict the evolution of freight rates within their markets of interest, which is a key determinant of the cost of their export operations. On the other hand, it will also be useful for operators that offer such services, providing a benchmark for the evolution of their own freight rates and those on the market.

 

Participating companies

 

Methodology

Conceptually, the VCFI is a quantitative index that enables the objective measurement and comparison of the data relating to sea freight rates from the port of Valencia.  This index has been created based on information obtained from primary data sources, formed by twelve top level panelists that operate in the port of Valencia, including freight forwarders and shipping companies. On a monthly basis, the panelists send the freight rate data of the month ending at the request of the Valenciaport Foundation. The composite index is calculated after receiving and checking the individual monthly data on the export freight rates for each of the ports, obtaining the average freight rates for each port, which will be entered into the composite index with its corresponding weighting. Taking into account that the freight rates of certain sea routes are negotiated in dollars, the exchange rates published monthly by the European Central Bank will be used for conversion to the euro. The rate provided by the panelists includes the ocean freight spot rate and the following surcharges:

  • Bunker Adjustment Factor (BAF)/ Fuel Adjustment Factor (FAF)/ Low Sulphur Surcharge (LSS)
  • Emergency Bunker Surcharge(EBS)/ Emergency Bunker Additional (EBA)
  • Currency Adjustment Factor(CAF)/ Yen Appreciation Surcharge (YAS)
  • Peak Season Surcharge(PSS)
  • War Risk Surcharge(WRS)
  • Port Congestion Surcharge (PCS)
  • Suez Canal transit Fee/Surcharge (SCS)/ Suez Canal Fee (SCF)/ Panama Transit Fee (PTF)/ Panama Canal Charge (PCC).
Comment of the month

In October, the VCFI changed its trend in comparison with the previous month and experienced a rise of 2.57%, standing at 1,105.61 points against the 1,077.89 points of the previous month. In fact, this is the third most important increase so far this year, behind the experienced in the months of June (growth of 6.28%) and April (growth of 3.44%). In this sense, the accumulated growth throughout during this period reaches a rate of 10.56%.

When we analyzed the freight rates for each of the 13 geographical areas studied for VCFI, in contrast to the previous month, in October we found an upward trend in most of them: 8 of the areas experienced a rise in freight rates, most accused in North America and the Eastern Mediterranean; On the other hand, 2 areas remain stable and 4 of them follow a downward trend, highlighting among them the strong decline suffered by export rates with Asia.

When the strong rise in freight rates with North America is analysed in detail (the same result obtained by other similar indices), a change in trend can be observed in export traffic from Valenciaport to this market. While in the summer months the traffics suffered a slight decrease, in September they experience a strong rise that put upward pressure on the freight rates.

Therefore, the high importance of the traffic with this area greatly influences the overall result obtained by the VCFI. On the other hand, with China, freight rates continue to fall due to the downward trend of export traffic from Valenciaport to this country

The Valencia Containerised Freight Index (VCFI) is an index number with basis of 1000 in January 2018 that shows the evolution of all-in maritime spot freight rates in the container export market with maritime cargo from Valenciaport with the 13 main geographical areas it connects with. The chart shows the monthly evolution of the index from January to September 2018.