Summary
High trade growth in the Asia-EU and Asia-Middle East trade lines is the sole bright spot in liner shipping. Conferences and individual companies are looking at creative ways to restore profitability.
Analysis
Trade growth and rate recoveries are mixed across the liner shipping trade lanes. Some reported numbers are:
-Asia-EU trade volumes up 21% and rates up 9%
-Asia-Middle east trade volumes up over 20% and rates up 6%
-Transpacific volumes up less than 10%, and rates mixed, some being down 1%, while others are up 2%
-Transatlantic volumes are up less than 5%, and rates are flat.
Inland costs continue to increase, and most companies are hopeful of recovering costs through surcharges, particularly during the peak shipping season.
More importantly, liner companies are reviewing their practices in regards to the lighter return-haul legs, namely EU-Asia and US-Asia. These legs often have load factors of 30 to 40%, and rates less than half of the head-haul. When analyzed, many companies report that beyond a base ballasting level, carrying cargo in this direction is at a loss due to increased fuel consumption. In such cases, it makes business sense to carry empty containers for subsequent head-haul cargo than it does to accept freight.
With so much empty capacity in the regular trade loops, it is unlikely that shippers will accept significant rate increases in the return-haul legs. However, individual companies may find economies from consolidating shipments at less frequent intervals.
