Investment Rating - The report maintains a rating of "Overweight" for the transportation sector [6] Core Views - The geopolitical risks in the Middle East have escalated, leading to a surge in VLCC freight rates. As of June 15, the freight rate for the VLCC Middle East to China route increased from approximately 40 WS points to 58.5 WS points [2] - The ongoing conflict between Israel and Iran has raised the risks associated with oil transportation, with potential sanctions on Iranian oil production likely to increase demand for compliant oil transportation [3] - The transportation sector is expected to see a recovery in oil shipping rates due to geopolitical tensions and potential sanctions on Iranian oil, which could lead to a shift in market share towards OPEC+ and U.S. shale oil producers [3] Summary by Sections 1. Market Overview - The transportation sector's performance over the past five trading days showed a slight increase of 0.05%, ranking 13th among all sectors. The Shanghai Composite Index decreased by 0.25% [4][9] 2. Shipping Industry 2.1 Oil Shipping - As of June 12, the BDTI index was at 909 points, down 4.4% from the previous week. VLCC rates were at $25,096 per day, down 7.7% [16] - The geopolitical situation has led to increased oil transportation risks, with approximately 11% of global maritime trade passing through the Strait of Hormuz [3] 2.2 Container Shipping - The SCFI index averaged 2,088 points as of June 13, down 6.8%. European freight rates increased by 10.6%, while rates for the U.S. West Coast decreased by 26.5% [35] 3. Air Transportation - In April 2025, domestic passenger traffic in China reached 54.52 million, a year-on-year increase of 7.2%. International passenger traffic increased by 25.9% [59][67] 4. Express Delivery - In May 2025, the volume of express delivery services reached 17.3 billion items, a year-on-year increase of 17.2%, with revenue of 125.6 billion yuan, up 8.2% [72][76] 5. Railway and Road Transportation - In April 2025, railway freight turnover was 3,019 billion ton-kilometers, up 8.4% year-on-year, while road freight turnover was 6,886 billion ton-kilometers, up 2.8% [82][84]