ONGOING box ship cascading is making freight rates volatile and better capacity management on Asia-Europe trades is needed more than on the transpacific and intra-Asia lanes, says HSBC's Transport Indicator.
The indicator said the peak season would be "mixed", characterised by "a divergence by route due to demand-supply dynamics". This will keep Asia-Europe rates relatively high while transpacific spot rates are expected to struggle.
TSA lines are hoping a US$400 per FEU peak season surcharge for all eastbound shipments from June 15 will stick, whereas the last attempt failed, reported Lloyd's List.
"We have seen increasing signs of a rebound in trade volume supported by a sharp rebound in one of our favourite lead indicators, PMI New orders minus inventory," said HSBC. "Europe's 'New orders minus inventory' index has also continued to increase.
"However, turnover at the recently concluded spring session of the Canton trade fair, which leads China's exports by three to four months, dipped two per cent from the previous session and 13 per cent year on year, indicating a weak peak season.
"And the recent build-up of inventory with retailers in the US also does not bode well, in our view."
Another reason for HSBC gloom is the increase in new orders for larger vessels, which could increase the oversupply and delay any recovery beyond 2015. "A weaker-than-expected peak season; and higher-than-expected bunker costs could erode the industry's profitability," said the report.
MARKETS
06 June 2014 - 20:58
HSBC Transport Indicator: Mixed peak season to hit volumes and rates
ONGOING box ship cascading is making freight rates volatile and better capacity management on Asia-Europe trades is needed more than on the transpacific and intra-Asia lanes, says HSBC's Transport Indicator.
MARKETS
06 June 2014 - 20:58
HSBC Transport Indicator: Mixed peak season to hit volumes and rates
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