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Fragile European economies will have a knock-on
effect in Asia
04/05/2012 12:41
Fragile European economies will have a knock-on effect in Asia - Lloyd...
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And with demand on tradelanes to Europe softening, can carriers keep
rates from falling again?
David Badger
Wednesday, 02 May 2012
Economic problems across Europe, softening demand for imports, are expected to have a knock-on
negative effect on Asia’s economic performance for the rest of the year, according to analysts.
BoxTradeIntelligence (BTI) estimates that containerised volumes from Asia will grow by less than 5% this year,
following an estimated year-on-year increase of 7.5% in 2011,
BTI said: “This highlights that, despite a healthy intra-regional economy, Asia is not immune to the fragile global
economy and to the overall uncertainty.”
After an estimated increase of around 7% in 2011, the Asia-Europe westbound trade lane (including both North
Europe and the Mediterranean) is forecast to decrease by around 1% in 2012.
These estimations appear even more negative, given that in 2010 and 2011 Europe accounted for more than 33%
of Asia’s exports.
However, added BTI, transpacific eastbound traffic seemed to be going in the opposite direction. Last year,
container volumes from Asia to North America increased by less than 3%, while in 2012, growth is forecast to be
above 4%.
Despite a Q1 2012 increase in average utilisation level on the trade lanes out of the Far East (excluding
intra-Asia traffic) over the same quarter last year, falling freight rates, along with an increase in bunker costs
over the period, resulted in a severe decrease in overall profitability.
“However,” added BTI, “severe cuts in capacity by the main shipping companies have resulted in clear signs of
recovery in freight rates since the Chinese New Year [23 January].”
The latest general rate increases (GRIs) by the carriers were implemented yesterday on both headhaul routes.
Container freight derivatives broker Steve Phillips said: “The surprising factor seems to be that rates continue
moving upwards and, prior to yesterday’s increases, have pretty much stuck.
“It’s early to say whether the carriers will get the entire GRI they are looking for. The true figures should be
seen when the WCI [World Container Index] is released later this week, showing the actual prices shippers are
paying, post-GRI.
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“However, since early February we have already seen Shanghai-Europe [rates] rise 160%, so is it really viable
that the carriers can push through even more increase?
“We are certainly hearing that sentiment may be slowing, and the forward curve into Q3 and Q4 is certainly
reflecting this.
FEATURED DESTINATION
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