Asia to Europe container traffic down 5%

Container shipping lines that are already incurring big losses due to ship oversupply could suffer further from falling demand, after the latest figures for volumes on the most important trade route showed a sharp fall. Figures published on Wednesday by Container Trades Statistics, the body that compiles data on container trades into and out of Europe, showed that traffic from Asia to Europe fell 5.33 per cent between November 2011 and the previous year to 1.04m twenty-foot equivalent units (TEUs). European container imports from all sources fell 3.75 per cent compared with November 2010.

The figures are the latest sign that worsening world economic conditions are starting to depress world trade in the consumer and semi-finished goods that container ships and freight aircraft carry. Figures published in November by the International Air Transport Association, the aviation trade body, had shown that air cargo volumes worldwide started to decline from September, when volumes were 4.8 per cent down from the previous year. The Asia to Europe route is the most important long-haul container shipping route, bringing goods from China and other Asian manufacturing centres to Europe’s economic heartland around the North Sea. Air cargo volumes typically fall in a downturn earlier than container shipping volumes because retailers and other end-customers cut back on high-cost, high-speed air freight movements more quickly when demand slackens than they do on movements by sea. The last set of CTS figures had shown that Asia to Europe trade volumes were still growing as recently as October, when volumes grew 3.4 per cent.

“Imports to Europe from Asia declined by 6 per cent [compared with October] – the lowest monthly volume since Chinese new year last February,” CTS wrote in its commentary on the figures. The CTS data also showed the continuing effects of ship oversupply on prices, with its price index for imports from Asia to Europe falling 4 points to the lowest levels since 2009, during the worst year in container shipping’s history. Rates per container on the Asia to Europe route slumped in the middle of last year as an influx of huge new ships – and the launch by Denmark’s Maersk Line of the first ever daily service of departures from key Asian ports to Europe – prompted lines to slash prices. There have also been signs that Maersk Line and Switzerland’s Mediterranean Shipping Company have been embroiled in a battle to undercut each other’s rates – although Nils Andersen, chief executive of AP Møller-Maersk, Maersk Line’s parent, attributed the falling rates in November to panic among Maersk Line’s competitors over its new service.

Source: ft.com