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Stability forecast for Asia-Europe ocean freight rates
Published:2018-12-1   Have been here 40   Source:泓威国际物流

Asia-Europe headhaul container freight rates are expected to remain relatively stable over the coming months, but the transpacific eastbound trade is set for an overall rates downturn, particularly to the US west coast, according to the latest market analysis from Maritime Strategies International.

MSI said “impressive” year-on-year growth in September and recent data revisions had contributed to a more positive picture of the Asia-Europe headhaul. “With successive months of negative growth revised away and 7% growth in September, overall year-to-date growth is now estimated at 1.7%,” said the analyst.

“We expect reduced pressure on household incomes will support volume growth of 2-3% in the coming quarters.”

This will translate in January to forecast average spot freight rates on the Asia-Europe trades of just over $900 per TEU, with potentially higher rates in the immediate run-up to Chinese New Year, according to MSI. “Over April, we expect average spot rates of around $670 per TEU, somewhat higher than the equivalent position in 2017,” it added.

On the transpacific, however, the outlook is less rosy. Transpacific volumes continued to surge in September and October with 10% and 7% year-on-year growth recorded, but MSI said there were now signs the headhaul trade is running out of steam ahead of tariff hikes on 1 January.

“While there is the potential for one last push on the transpacific in early-to-mid December, the recent export surge is very likely on its last legs,” said the analyst.

“This is most evident on US West Coast-bound cargoes so far. Here, extra loaders and vessel upsizing have, in combination with slowing volume growth, loosened market balances. With further slowing highly likely as much of this volume growth was driven by tariff front-running, carriers will need to rein capacity back in over the coming quarters to enter the annual contracting season in a solid position.”

This is forecast to result in average spot rates of around $1,900 per FEU in January and $1,440 per FEU in April, by which point MSI expects the impact of January’s tariff increase to be a key factor. “Aggressive capacity management – especially if liners try to prop up spot rates prior to annual contracting season – could limit the damage, but our expectation remains that rates are going to fall,” said the analyst.

Ongoing excess capacity will continue to be major factor in spot rates in 2019, and contract negotiations between shippers and carriers. MSI said aggregate fleet growth since the end of 2017 of 5.6% had comfortably outstripped aggregate demand growth.

“While 2019 as a whole will bring a slower pace of fleet growth – we now expect overall (fleet) growth of around 3% – the next six months will still bring a large volume of vessel deliveries,” said MSI. “As usual, this will be driven by tonnage larger than 10,000 TEU.”

In another article published today in Lloyd’s Loading List, Drewry highlights that container lines have done a far better job of managing capacity on the Asia-ECNA route than for other East-West trades, discipline that has been rewarded with much higher freight rates – which could be retained assuming they adopt a wait-and-see approach regarding the effects of January’s hike in US-China tariffs and lines look to protect the gains by removing some tonnage if necessary.

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