After recording a 10% full-year growth in westbound volume 2013 over the year before, the early signals for 2014 show continued growth, as Mediterranean exporters continue to reap the harvest of a recovering US economy.
Westbound
Volumes on the westbound trade between the Med and the North American Atlantic and Gulf coast ports in February showed a 10% decline on January, although much of that is seasonal, and in fact year-on-year, compared with February 2013, they were up by just under 5%, indicating a continued expansion in trade following several very lean years.
Figure 1
Westbound Mediterranean-North America Container Traffic (’000 teu)
Source: Drewry Maritime Research, derived from PIERS (www.piers.com) and CTS (www.containerstatistics.com)
As with the transatlantic trade between North Europe and North America analysed last week in Drewry’s Container Insight Weekly, there has been little changes in the terms of capacity prior to the official launch of the P3 and G6 alliances, with carriers in general playing a game of wait-and-see.
In anticipation of that there has been a gradual increase in capacity overall on the trade, and although it has been relatively marginal and incremental – after remaining broadly at a constant level in the last quarter of last year and this January, it rose by 2% in February month-on-month and then 3% in March month-on-month. The latest capacity figures show that there are more slots deployed on the trade currently than for well over a year: March saw 154,000 teu of capacity deployed.
Figure 2
Westbound Mediterranean to North America Capacity (’000 teu)
Source: Drewry Maritime Research
This has had a consequentially negative effect on utilisation, which had been hovering around the mid-60% mark for the last few months, but dropped to 58% in March, as extra capacity was deployed.
Figure 3
Westbound Mediterranean-North America Utilisation v Rates
Sources: Drewry Maritime Research; Drewry Container Freight Rate Insight (www.drewry.co.uk/cfri)
The arrival of the mega-alliances was opposed by some Mediterranean shippers, who filed comments to the FMC when it was assessing whether to clear the P3 and G6 proposals. Turkish freight forwarders, who have been facilitating tremendous growth in exports to the US out of the country, claimed that the larger groupings would lead to the loss of smaller carriers from the trade.
In a similar vein, the Med-America Shippers Association, which represents a significant portion of the wine and alcohol shipments that a are fundamental part of the trade, argued that the alliance would lead to a reduction in the range of services and increasing rates, and estimated that the P3 would hold a 55% eastbound market share and a 58% westbound market share.
Moreover, it expressed concern about the quality of services and the expected use of a single Med transhipment hub, which has been an increasing feature of the trade, as previous updates of the Container Insight Weekly have examined.
The problem for wine shippers especially is the sensitivity of their cargo – the use of transhipment hubs results in increased transit time and variation in temperatures, as the containers are unloaded and reloaded at more than one port, and ultimately decreases the shelf life of the products.
Eastbound
In contrast to many east-west trades, the North America-Mediterranean route is relatively balanced, and volumes of agricultural goods have continued to show the growth that was seen in the last quarter of 2013.
With 76,000 teu shipped in February, the recent previous high of October last year was marginally surpassed, with all the export growth coming out of the US market.
Figure 4
Eastbound North America-Mediterranean Container Traffic (’000 teu)
Source: Drewry Maritime Research, derived from PIERS (www.piers.com) and CTS (www.containerstatistics.com)
Capacity is the same story as on the westbound leg, having grown month-on month in the first two months of this year, with the same result that capacity of 155,000 teu is at the highest level for at least a couple of years .
Figure 5
Eastbound North America to Mediterranean Capacity (’000 teu)
Source: Drewry Maritime Research
Figure 6
Eastbound North America-Mediterranean Utilisation v Rates
Sources: Drewry Maritime Research; Drewry Container Freight Rate Insight (www.drewry.co.uk/cfri)
The net result is that despite stronger trade volumes, utilisation rates have remained stubbornly low, although they did breach the 50% mark in February for only the third time in a year. However, they can be expected to decline once more if volumes in March did manage to keep place with the growth in slots.
Table 1
Mediterranean-North America – Estimated Monthly Supply/Demand Position
Notes: *Based on effective capacity after deductions are made for deadweight and high-cube limitations and then again for out-of-scope cargoes, ie. those relayed to areas outside the range. Where relevant, operational capacities have also been adjusted for slots allocated to wayport cargoes.
Source: Drewry Maritime Research (www.drewry.co.uk/ciw)
Westbound
Volumes on the westbound trade between the Med and the North American Atlantic and Gulf coast ports in February showed a 10% decline on January, although much of that is seasonal, and in fact year-on-year, compared with February 2013, they were up by just under 5%, indicating a continued expansion in trade following several very lean years.
Figure 1
Westbound Mediterranean-North America Container Traffic (’000 teu)
Source: Drewry Maritime Research, derived from PIERS (www.piers.com) and CTS (www.containerstatistics.com)
As with the transatlantic trade between North Europe and North America analysed last week in Drewry’s Container Insight Weekly, there has been little changes in the terms of capacity prior to the official launch of the P3 and G6 alliances, with carriers in general playing a game of wait-and-see.
In anticipation of that there has been a gradual increase in capacity overall on the trade, and although it has been relatively marginal and incremental – after remaining broadly at a constant level in the last quarter of last year and this January, it rose by 2% in February month-on-month and then 3% in March month-on-month. The latest capacity figures show that there are more slots deployed on the trade currently than for well over a year: March saw 154,000 teu of capacity deployed.
Figure 2
Westbound Mediterranean to North America Capacity (’000 teu)
Source: Drewry Maritime Research
This has had a consequentially negative effect on utilisation, which had been hovering around the mid-60% mark for the last few months, but dropped to 58% in March, as extra capacity was deployed.
Figure 3
Westbound Mediterranean-North America Utilisation v Rates
Sources: Drewry Maritime Research; Drewry Container Freight Rate Insight (www.drewry.co.uk/cfri)
The arrival of the mega-alliances was opposed by some Mediterranean shippers, who filed comments to the FMC when it was assessing whether to clear the P3 and G6 proposals. Turkish freight forwarders, who have been facilitating tremendous growth in exports to the US out of the country, claimed that the larger groupings would lead to the loss of smaller carriers from the trade.
In a similar vein, the Med-America Shippers Association, which represents a significant portion of the wine and alcohol shipments that a are fundamental part of the trade, argued that the alliance would lead to a reduction in the range of services and increasing rates, and estimated that the P3 would hold a 55% eastbound market share and a 58% westbound market share.
Moreover, it expressed concern about the quality of services and the expected use of a single Med transhipment hub, which has been an increasing feature of the trade, as previous updates of the Container Insight Weekly have examined.
The problem for wine shippers especially is the sensitivity of their cargo – the use of transhipment hubs results in increased transit time and variation in temperatures, as the containers are unloaded and reloaded at more than one port, and ultimately decreases the shelf life of the products.
Eastbound
In contrast to many east-west trades, the North America-Mediterranean route is relatively balanced, and volumes of agricultural goods have continued to show the growth that was seen in the last quarter of 2013.
With 76,000 teu shipped in February, the recent previous high of October last year was marginally surpassed, with all the export growth coming out of the US market.
Figure 4
Eastbound North America-Mediterranean Container Traffic (’000 teu)
Source: Drewry Maritime Research, derived from PIERS (www.piers.com) and CTS (www.containerstatistics.com)
Capacity is the same story as on the westbound leg, having grown month-on month in the first two months of this year, with the same result that capacity of 155,000 teu is at the highest level for at least a couple of years .
Figure 5
Eastbound North America to Mediterranean Capacity (’000 teu)
Source: Drewry Maritime Research
Figure 6
Eastbound North America-Mediterranean Utilisation v Rates
Sources: Drewry Maritime Research; Drewry Container Freight Rate Insight (www.drewry.co.uk/cfri)
The net result is that despite stronger trade volumes, utilisation rates have remained stubbornly low, although they did breach the 50% mark in February for only the third time in a year. However, they can be expected to decline once more if volumes in March did manage to keep place with the growth in slots.
Table 1
Mediterranean-North America – Estimated Monthly Supply/Demand Position
Notes: *Based on effective capacity after deductions are made for deadweight and high-cube limitations and then again for out-of-scope cargoes, ie. those relayed to areas outside the range. Where relevant, operational capacities have also been adjusted for slots allocated to wayport cargoes.
Source: Drewry Maritime Research (www.drewry.co.uk/ciw)