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Asia-North Europe Trade Remains Muted



Headhaul demand growth in the Asia-North Europe trade remains muted and this year’s third quarter peak season is proving uninspiring for the carriers, according to shipping consultancy Drewry.

Westbound volumes rose year-on-year by 1.8% in the second quarter, following a 1.2% rise in the first three months of 2016. April’s uplift of 7.7% followed on from strong gains in March but results for both May and June showed a slight negative tendency and the 12-month rolling growth average at the end of June of minus 2.0% reveals that on-going annualised growth has eluded this trade for a whole year now.

The peak season cargo rush in the third quarter to date has not been particularly strong and the westbound ships, while achieving load factors in excess of 90%, have not come under space pressure. The third quarter should still produce the largest quarterly volume of the year but the margin between westbound cargo flows in that period and the preceding three months may be relatively slim, Drewry said.

The rate wars that marked the first quarter of 2016 have abated and a clear upwards trajectory for spot prices was seen since the spring, however, according to the shipping consultancy, “without full ships the recovery in going rates always appears fragile.”

The lines do enough to boost prices at the start of a given month to ensure there is a healthy margin between monthly rate agreements and their beneficial cargo owner (BCO) annually contracted volume accounts, however, after the first week has passed spot rates are allowed to slip back and this pattern is likely to continue until the end of the third quarter.

While BCO rates are unlikely to drop any lower in 2017, the harshly competitive environment when the alliances regroup next April probably means there will not be any appreciable increase in BCO rates next year, according to Drewry.

(via WMN)

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ARI shipping corporation, shipping corporation, heavy machinery shipping, warehousing, fulfillment, harzardos cargo, refridgerated cargo, oversized cargo, cargo, materia handling, shipping, boat transport
ARI shipping corporation, shipping corporation, heavy machinery shipping, warehousing, fulfillment, harzardos cargo, refridgerated cargo, oversized cargo, cargo, materia handling, shipping, boat transport
ARI shipping corporation, shipping corporation, heavy machinery shipping, warehousing, fulfillment, harzardos cargo, refridgerated cargo, oversized cargo, cargo, materia handling, shipping, boat transport
ARI shipping corporation, shipping corporation, heavy machinery shipping, warehousing, fulfillment, harzardos cargo, refridgerated cargo, oversized cargo, cargo, materia handling, shipping, boat transport