Europe-Mideast-South Asia trades hit by Ramadan's brief peak: Drewry
THE post-Ramadan slump on the Europe to Middle East and South Asia trade was sharp with container volumes from May to July down by 20,000 TEU on the eastbound leg and by 17,000 TEU westbound, according to London's Drewry Maritime Research.
"Having pushed additional capacity into the trade to cater to the anticipated cargo peak into the two regions in preparation for the start of the holy month in June, excess demand took its toll on utilisation once the Ramadan-related spike had passed," said an analysts' report.
Headhaul Europe to Middle East/South Asia traffic declined by 1.2 per cent year on year in July, with Mideast calls bearing the brunt of the decline.
Conversely, it was the South Asia to Europe routing that felt the most pain on the westbound route, decreasing by 13,000 TEU month-on-month in July.
Reflecting the slowdown on the eastbound trades, the 12-month rolling average stood at just 2.2 per cent for the Europe to Mideast leg and at five per cent on the Europe to South Asia leg in July.
Westbound trades continue to show growth with double digit gains on the Mideast to Europe trade, reflecting the longer term strength on that leg.
By capacity, shipping lines have been clawing back tonnage to address the declines in traffic flows on eastbound Europe to Middle East services with the removal of 21,000 TEU from July to August.
But this still marks year-on-year growth of 14.5 per cent. There has been less emphasis on reducing Europe to South Asia capacity, which stood at 152,000 TEU in August, up 23 per cent year on year.
On the westbound trades, lines have proved reluctant to reduce capacity despite lower volumes.
Up 12 per cent, capacity on the Mideast to Europe leg was at 139,000 TEU in August, down just 3,000 TEU from July. Capacity on the South Asia to Europe route rose by 3,000 TEU in August up 21 per cent.
The continuing imbalance between traffic and capacity has kept pressure on utilisation, which stands at 66 per cent for the Europe to Middle East trade.
Europe to South Asia utilisation is better at 74 per cent. Freight rates are consequently under pressure.
Rotterdam to Jebel Ali freight rates dropped to US$860 per FEU in August, down $20 per FEU from the previous month, while Rotterdam to Nhava Sheva freight rates fell to $900 per FEU in August.
Westbound utilisation fared little better with Mideast to Europe sailings recording 46 per cent utilisation in July; and South Asia to Europe standing prouder at 73 per cent.
The comparative strength of the latter gave lines something to latch on to for higher rates, but utilisation is still off the 90+ per cent peaks from the start of the year.
Freight rates from Nhava Sheva to Rotterdam increased by $350 per FEU in August to $1,360 per FEU, while Jebel Ali to Rotterdam freight rates stagnated at $1,580 per FEU.
THE post-Ramadan slump on the Europe to Middle East and South Asia trade was sharp with container volumes from May to July down by 20,000 TEU on the eastbound leg and by 17,000 TEU westbound, according to London's Drewry Maritime Research.
"Having pushed additional capacity into the trade to cater to the anticipated cargo peak into the two regions in preparation for the start of the holy month in June, excess demand took its toll on utilisation once the Ramadan-related spike had passed," said an analysts' report.
Headhaul Europe to Middle East/South Asia traffic declined by 1.2 per cent year on year in July, with Mideast calls bearing the brunt of the decline.
Conversely, it was the South Asia to Europe routing that felt the most pain on the westbound route, decreasing by 13,000 TEU month-on-month in July.
Reflecting the slowdown on the eastbound trades, the 12-month rolling average stood at just 2.2 per cent for the Europe to Mideast leg and at five per cent on the Europe to South Asia leg in July.
Westbound trades continue to show growth with double digit gains on the Mideast to Europe trade, reflecting the longer term strength on that leg.
By capacity, shipping lines have been clawing back tonnage to address the declines in traffic flows on eastbound Europe to Middle East services with the removal of 21,000 TEU from July to August.
But this still marks year-on-year growth of 14.5 per cent. There has been less emphasis on reducing Europe to South Asia capacity, which stood at 152,000 TEU in August, up 23 per cent year on year.
On the westbound trades, lines have proved reluctant to reduce capacity despite lower volumes.
Up 12 per cent, capacity on the Mideast to Europe leg was at 139,000 TEU in August, down just 3,000 TEU from July. Capacity on the South Asia to Europe route rose by 3,000 TEU in August up 21 per cent.
The continuing imbalance between traffic and capacity has kept pressure on utilisation, which stands at 66 per cent for the Europe to Middle East trade.
Europe to South Asia utilisation is better at 74 per cent. Freight rates are consequently under pressure.
Rotterdam to Jebel Ali freight rates dropped to US$860 per FEU in August, down $20 per FEU from the previous month, while Rotterdam to Nhava Sheva freight rates fell to $900 per FEU in August.
Westbound utilisation fared little better with Mideast to Europe sailings recording 46 per cent utilisation in July; and South Asia to Europe standing prouder at 73 per cent.
The comparative strength of the latter gave lines something to latch on to for higher rates, but utilisation is still off the 90+ per cent peaks from the start of the year.
Freight rates from Nhava Sheva to Rotterdam increased by $350 per FEU in August to $1,360 per FEU, while Jebel Ali to Rotterdam freight rates stagnated at $1,580 per FEU.