The Valencia Containerized Freight Index reflects the evolution of market rates for the export of full containers by sea from Valenciaport.
The Valencia Containerized Freight Index (VCFI), reflecting the evolution of market rates for the export of full containers by sea from Valenciaport, launched this month.
Published the second Friday of each month, the VCFI was developed by the Port Authority of Valencia (APV) and the Valenciaport Foundation, an applied research and training center that serves the port and logistics cluster. The foundation is a nonprofit initiative of the APV.
Valenciaport plays a prominent role in global container shipping, with BlueWater Reporting’s Port Dashboard tool illustrating that 33 liner services sailing to other regions besides the Mediterranean call the port, including 32 fully cellular container services and one co-ro service.
The first stage of the VCFI consists of an aggregate composite index, but in the future, it will be broken down into the 13 geographic areas that correspond to the main traffic corridors from Valencia.
Within these 13 geographic areas, 42 ports have been selected that represent 60 percent of the port’s export container traffic, and their rates will serve as a reference for calculating the index.
The VCFI fills the gap in the western Mediterranean, an area that accounts for 3.8 percent of world trade but was lacking its own indicator for export freight rates, the port explained.
The index is based on data obtained from primary data sources, formed by 12 panelists that operate at the port, including eight shipping companies and four freight forwarders. The eight shipping companies are MSC, COSCO, “K” Line, Grimaldi Lines, Arkas, Deutsche Afrika Linien, White Line Shipping and Compagnie Tunisienne de Navigation. The four freight forwarders are Alonso, Grupo Raminatrans International Forwarders, Savino Del Bene and TIBA.
“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,” the port said. “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 rates and various surcharges, including:
• The bunker adjustment factor/fuel adjustment factor/low sulfur surcharge;
• Emergency bunker surcharge/emergency bunker additional;
• Currency adjustment factor/yen appreciation surcharge;
• Peak season surcharge;
• War risk surcharge;
• Port congestion surcharge;
• And fees associated with transit through the Suez and Panama canals.
Since the VCFI’s objective is to illustrate the trend of the export freight market from Valencia, an index number has been built, which takes the base number of 1,000 in January 2018, the first month of the period.
For the month of June, the index stood at a reading of 1,080.22, up 6.28 percent from May.
“In addition to the movements of supply and demand, one of the main causes that have led to the rise in freight rates is the increase in the barrel of Brent as of March, continuing the upward trend in the following months,” the port said.
The barrel of Brent crude rose from $65 per barrel in March to almost $80 at the end of June, and some analysts believe that the rise in the price of oil may continue, reaching up to $85 a barrel in the short term, which will continue to affect the maritime industry, the port added.
“The price of oil is one of the main determinants of maritime transport costs, therefore, as a result of this positive correlation between the two variables, the increase experienced by the barrel of Brent has been transferred to maritime freight rates, through the application of fuel surcharges in the last month,” the port said.
Container rate index launches in Mediterranean
