After more than a month's observation, forwarders are gradually realising that the Asia-North Europe route is facing an impending major disruption. The sharp increase in demand has caused slot resources to become extremely tight and spot rates on the Asia-Europe route are soaring at breakneck speed.
It is learnt that on two important trade routes from Asia to Northern Europe and the Mediterranean, the spread between spot and contracted rates has widened significantly, reaching a level of more than US$2,500 per FEU (40ft TEU). Even those shippers who already have fixed agreements in place are having to contend with the additional costs they will have to pay to get their cargo on board.
According to data provided by Xeneta, a rate benchmarking platform, over the past three months, shippers with contracts with carriers have been trading at around US$2,000 per FEU on Asia-North Europe routes and US$2,500 per FEU on Asia-Mediterranean routes.However, this pricing trend also seems to be posing a considerable challenge for carriers.
According to the eeSea liner database, the route saw a nearly 25 per cent reduction in capacity in April this year. According to the schedule published by the carriers, the capacity that should have been provided to shippers was about 1.68 million TEU, but the actual capacity sailed was only 1.29 million TEU. due to a variety of factors, such as empty voyages, missed voyages and delayed arrivals, shippers were faced with a capacity shortfall of 397,000 TEU, which is equivalent to the loss of capacity of about 200,000 40-foot containers.
From a voyage perspective, the actual number of container ships arriving in Northern Europe in April was only 128, compared to the originally advertised number of 169 voyages. This data further confirms the tight capacity situation on the route.
Although spot freight rates for this month's trade have continued to climb, there is a view that this is not entirely due to an imbalance between supply and demand caused by empty voyages. In fact, carriers have been working hard to increase capacity to make up for the shortfall that occurred in April. Capacity is expected to reach 1,599,000 TEUs this month, while carriers have actually provided capacity of 1,477,000 TEUs on 149 flights (under ideal conditions), which almost makes up for half of the capacity gap in April.
To further make up for the capacity shortfall, some carriers have already begun to take action. Hapag-Lloyd, for example, plans to restart its Asia-West Africa-North Europe standalone loop, suspended since spring 2023, in mid-June, naming it the China-Germany Express (CGX). According to Sea-Intelligence Maritime Analysis, the average size of vessels on the route will be limited to 3,500 TEU.
In addition, MSC will adjust its port rotation on the Swan route between Asia and Northern Europe in June, adding Hamburg as a port of call. The average ship size on this route will reach 14,000 TEU, showing the carrier's active efforts to optimise route layout and increase capacity.
However, despite the current strong market performance, industry scholars are still cautious about whether high demand can be sustained in the second half of this year. According to the World Economic Forum's latest Chief Economist Outlook report, the outlook for the European economy is bleak, with nearly 70 per cent of economists predicting sluggish growth for the rest of 2024.
Despite this, Alphaliner's figures show some signs of optimism. Despite the pressure on containerised freight volumes in the coming months, demand for freight on ‘headhaul’ routes is expected to remain strong, helping to maintain high levels of capacity demand.
https://www.cnss.com.cn/html/hygc/20240603/353558.html
|
Back:
Next:
