CARRIERS serving the Asia to the Middle East and South Asia trades are struggling to maintain load factors to support freight rate increases with spot rates falling, according to Drewry Container Insight.
The London-based analyst said in a research report: "Despite the strong volume growth, spot rates in this trade will remain subdued until carriers upgrade its status and stop treating it as second-fiddle when making capacity decisions."
The report pointed out that Shanghai to Jebel Ali spot rates fell US$230 in January to $1,460 per FEU. Spot rates from Shanghai to Nhava Sheva have been falling since July and dropped to a 10-month low of $1,210 per FEU in January, noted Newark's Journal of Commerce.
With much of the focus being on the three so-called "core" east-west trades, Drewry said developments to South Asia and the Middle East were often overlooked. "This is a mistake as westbound container volume from Asia to each of the two regions is now on a par with headhaul transatlantic traffic."
After a lean 2013 when volumes grew by one per cent, box traffic from Asia to the Middle East did far better in 2014.
Container Trade Statistics (CTS) reports that westbound volumes increased by 6.9 per cent last year to reach 3.3 million TEU. Much of this growth was supported by infrastructure projects through the region, according to Drewry.
The analyst said growth in the container trade to South Asia was even stronger, rising by 10.5 per cent to 2.92 million TEU.
According to the analyst, the overcrowded trades to the Middle East and south Asia not only have to contend with the upgrading of dedicated services with larger ships, but it is also beholden to changes made to mainline Asia-Europe and transpacific loops with wayport calls to ports such as Colombo or Jebel Ali.
The formation of the 2M and Ocean 3 shipping alliances did not directly affect the Middle East and south Asia trades, apart from a reshuffle of wayport calls to the regions, but Drewry said it has spurred MSC to start a new dedicated loop in March using ships of 8,000 TEU.
The New Falcon service will use eight ships calling at Guangzhou-Nansha, Xingang, Ningbo, Shanghai, Fuzhou, Shenzhen-Chiwan, Tanjung Pelepas, Singapore, Colombo, Dubai, Dammam, Jubail, Dubai, Nhava Sheva, Singapore and back to Guangzhou-Nansha.
WORLD SHIPPING
05 March 2015 - 20:30
Asia-Middle East, South Asia rates fall due to overcapacity
CARRIERS serving the Asia to the Middle East and South Asia trades are struggling to maintain load factors to support freight rate increases with spot rates falling, according to Drewry Container Insight.
WORLD SHIPPING
05 March 2015 - 20:30
Asia-Middle East, South Asia rates fall due to overcapacity
This news 9030 hits received.
These news may also interest you