By Richie Lin.    Photo：Kelly 

Recently, all shipping lines issued their GRI (General Rate Increase) at the beginning of August. It increased almost USD 1000 per 40GP compared the difference between the rates at the end of June and the rates in August. Shipping lines might see some positive numbers to boost their actions. Therefore, let’s take a few moments today to analyze if there are any positive news by the economic numbers issued publicly. Institute for Supply Chain Management (ISM) announced on July 15th that PMI in June was 46. This is the seventh consecutive months under the expansion line. The PMI is usually a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month. A PMI number under 50 represents a contraction, and a number at 50 indicates no change. PMI 46 in May meant many companies are still negative on the future of economy and will keep hesitating on giving new orders and productions. Even though PMI is still negative, but it began to show some positive sign when we check the numbers of new orders and the numbers of suppliers’ and customers’ inventory. By subtracting numbers of suppliers’ inventory from customers’ inventory, we can understand the ups and downs of inventory situation. When the difference between suppliers’ inventories and customers’ inventory widens, it indicates that customer (end-user) inventory is at a low point, and the supply chain is in the phase of replenishing inventories. In May, the inventory of factories is 45.80 and the inventory of end-users is 51.40. The difference is minus 5.6 points. In June, the number of suppliers’ inventory became 44 and the number of customers’ inventory became 46.20. The difference shrank to minus 2.2 points. This indicates that consumers are still buying products and the inventory is being digested significantly. And the numbers of new orders also came from 42.60 in May to 45.60 in June because customers saw the decrease of inventory then increased their orders to prepare for more consumptions.

Based on the numbers of new orders and the numbers of suppliers’ and customers’ inventory. issued in June, we can say that the economy is at least on the positive way to develop. Therefore the shipping lines might have a chance to keep the rates announced in August or even increase again shortly.

FCL market rate reference in week 31:

• Asia main ports to USAWC USD 2200~2300 per 40GP; 
• Asia main ports to USAEC and Gulf coast USD 3200~3300 per 40GP; 
• Asia main ports for IPI points of USA is USD 4200~4700 per 40GP. 
• Asia main ports to Europe base ports and West Mediterranean: USD 2000~3500 per 40GP.

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