Drewry: Slower Volumes Dent Carriers’ Hopes for Higher Contracts

ContainershipIllustration. Image Courtesy: Pxhere under CC0 Creative Commons license

Following the tariff-induced cargo rush of late-2018, container shipments from Asia to West Coast North America dived in the first quarter of 2019, denting carriers’ hopes of securing higher annual contracts.

The Asia-West Coast North America trade was booming at the end of last year with eastbound spot freight rates at a six-year peak, according to shipping consultancy Drewry. However, now that the sugar rush caused by the threatened tariffs on Chinese goods has passed, the market is readjusting to life with much slower volumes and prices.

Asia to US West Coast volumes declined by 3% year-on-year, which compares unfavourably with shipments to the East and Gulf coasts that combined grew by 4%. The fall-off in Asia to USWC demand from the fourth quarter of 2018 was at nearly 19% although the West Coast market was always likely to suffer the most from a tariff hangover as shippers had prioritised that gateway as the quickest means to beat the deadline.

“There was always likely to be a hangover from the tariff-induced cargo rush of late-2018, but the sting on Asia-West Coast North America looks to be more severe than carriers expected. This misjudgement looks set to keep annual contract increases in check,” Drewry explained.

The outlook is clouded by uncertainty surrounding the ongoing China-US trade talks and a mild slowdown in the US economy. The shipping consultancy noted that the industry is unlikely to see a repeat of the front loading of so much cargo – at least not on the same scale as witnessed last year.

“The trade will not benefit from the demand sugar-rush it received last year via the tariffs; the next phase is a reduction of inventories in the US and eastbound shipments from Asia to North America in general are expected to grow at a significantly reduced pace this year.”

Share this article

Follow World Maritime News

In Depth>


<< Feb 2020 >>
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 1

Eastern Mediterranean Offshore Conference and Exhibition (EMC) 2020

EMC 2020 conference will arm delegates with technical and commercial knowledge to capitalise…

read more >


Forum you will find out from the regulators, government bodies and major ports’ representatives what the near…

read more >

Belgian Offshore Days 2020

During this event, a conference will be held with focus on “Increasing value by data driven innovation…

read more >

7th Annual Arctic Exchange

Every year the Exchange invites delegates from across the globe to come together to listen to key senior management teams…

read more >