Flatter trading in August hides the fact that headhaul cargo growth from the Mediterranean to North America has been strong so far this year, while the return of stronger growth in traffic in the North East Asia-Australia trade is starting to bring freight rates back up after the recent slide, according to Drewry.
Westbound demand on the Mediterranean-North America lane was down 2000 TEU on the month before, whilst on the much smaller eastbound leg carryings were up 1000 TEU, Drewry reports.
Year-on-year, however, volumes were up a solid 12% for the month of August, showing that despite the late-summer calm, the picture remained much improved compared with 2013.
Drewry believes that the final throes of summer presented a relatively unchanged picture of demand and supply, both west and eastbound; and this shows limited prospect of changing dramatically anytime soon. Europe’s economy also remains lacklustre for the time-being which will do little to stir up this particular trade lane. Spot market rates will according to Drewry likely remain flat for the remainder of this year.
On the other hand, Drewry says that after a slow first half of the year, stronger demand returned to the North East Asia-Australia trade in August and September, with year-on-year growth of 6% and 10%, respectively. The September southbound demand was the highest monthly volume for the year to date.
On a 12-month rolling basis, this meant that southbound demand is now increasing by more than 5% a year, according to Drewry.
On the Australia-North East Asia trade lane, the link between utilisation and spot freight rates is holding. The fall in utilisation was mirrored by a decrease in freight rates until June; since June, the pendulum moved back in the other direction for both load factors and prices. However, spot rates have not jumped back to their October 2013 level of about USD 2,200, yet, Drewry reports.
Whereas headhaul southbound utilisation is starting to look a little better, northbound load factors in the backhaul direction are still languishing below 50%.
Drewry predicts that with increasing load factors from North East Asia to Australia, southbound freight rates are likely to continue to recover.