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A SURGE in demand on the major container trade lanes has seen tonnage redeployed from secondary routes, which in turn will see higher freight rates as a result, reports UK's Seatrade Maritime News.
Xeneta is warning shippers to expect a capacity shortfall in these secondary services where capacity has been redeployed to mainline trades, which will ultimately push up rates.
Global container volumes topped 74 million TEU in the first five months of this year, overhauling the 2021 record by 150,000 TEU as Chinese exports boomed, and shippers front loaded their orders.
This surge in demand has encouraged liner shipping companies to shift capacity from less lucrative services to high yield trades, and that will eventually have a knock-on effect on freight rates.
Xeneta figures, sourced from Container Trade Statistics, also show a 5.2 million TEU increase compared to volumes seen from January to May 2023, with this year's May volumes alone topping 15.9 million TEU.
Whereas increasing demand on backhaul trades has little significant impact due to the high level of spare capacity in the backhaul market, said a Xeneta market briefing: "Any change in demand on the major deep sea fronthaul trades is quickly felt in the market."
In the first five months of 2024, fronthaul volumes increased by 10.4 per cent compared to the same period in 2023 while growth on backhaul and intra-regional trades has increased by 4.4 per cent and 5.5 per cent respectively.
Spot rates on the European and US backhaul trades to Asia have softened substantially from their peak earlier this year, which was caused by the Red Sea crisis.
https://www.shippingazette.com/news?news_id=9240700000923
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