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.

 

After two months of a fairly stable pattern, export rates from Valencia experienced a 2.01% increase in April over the previous month, bringing the Valencia Containerised Freight Index (VCFI) to 1,072.38, accumulating a base period (January 2018) growth of 7.24%.

In April, oil prices continued their upward trend, rising for the fourth consecutive month to 70.73 dollars per barrel, compared to 66 the previous month, representing a rise of 6.5% per month and 20% since the beginning of 2019, as a result of cuts in production imposed by the Organisation of Petroleum Exporting Countries (OPEC) and sanctions imposed on some producers such as Iran and Venezuela. As a result, the price of oil is at its highest level in the range in which experts expect the Brent barrel to be in 2019, estimated at between 60 and 70 dollars a barrel.

In terms of supply, the decrease in the idle fleet is noteworthy, which represented 1.4% of the total fleet in mid-April, according to Alphaliner data, influenced by the need to replace decommissioned vessels in order to install scrubbers in view of the imminent entry into force of the new International Maritime Organisation regulations on the sulphur content of marine fuels. This trend will be further accentuated from the second half of 2019, when it is estimated that approximately 30 vessels per month will be withdrawn from service for an estimated time of between 45 and 60 days.

In terms of demand, although the sluggishness on some routes, such as those with the Far East, will lead shipping companies to adjust their supply by maintaining blanked sails, in others a greater dynamism is perceived, such as connections with the American continent. In the case of Valenciaport, the United States continues to be the main destination for exports, which grew by 20% compared to the first quarter of the previous year. This is a reflection of the evolution in exports in recent months from the Valencian Autonomous Community to the United States, especially in products such as electrical appliances and equipment, ceramic products, footwear and furniture. In terms of freight rates, this translates into one of the geographical areas in which prices have grown the most in the last month, reaching an all-time high since the VCFI was produced. Other areas of the American continent, such as Central America and the Caribbean and Atlantic Latin America are growing above the general index this month. In the opposite direction, only two areas of the VCFI register decreases in transport prices during this month, specifically, the Indian Subcontinent and the Middle East.

VCFI Western Mediterranean

In line with the general index, during the month of April export freight rates to the Western Mediterranean were 0.8% higher than in March, meaning that the sub-index for this region stands at 968.05 points. In this region, Algeria stands out as the country to which exports have grown the most this year, according to foreign trade data available (until February) and published by the Ministry of Industry, Trade and Tourism

VCFI Far East

In the case of the Far East regional sub-index, April saw an increase of 1.82% over the previous month, bringing the index to 850.97 points, a cumulative decrease of 14.9% since January 2019. As such, the sub-index has experienced two consecutive months of increase that coincide with the increase in traffic to the area and the greater dynamism of exports to China.