The expected decline in container demand has begun to emerge in reported volume figures.
Container Trades Statistics show a noticeable downturn in August, the latest month for which figures are available.
Global container of 14.9m teu were down 4.2% compared with August 2021 and down 3.3% compared with July 2022. For the eight months to the end of August, volumes are down 1.6% from the corresponding period in 2021.
“The global market is clearly changing and many of the leading indicators are starting to be reflected in the wider data,” CTS said. “The impact of interest rate increases in both Europe and North America is starting to restrict demand on a significant scale.”
Asia-Europe trade is showing a year-to-date decline of 4.6% compared with 2021, while volumes to the North America were down by 7.7% decline against August 2021, although flat on a year-to-date basis, indicating the higher volumes shipped earlier in the year were tailing off.
When demand falls rates usually follow, and the steep fall in various spot rate indices over the past month was also noted in CTS’ Global Price Index, which having already fallen from its highs in previous months was down another 4.1% in August.
“The key indices to Europe from Asia are down 15 points (from 273 to 258), reflecting the softer volumes year to date whilst Asia to North America index is showing a further decline of 17 points to 251 from 268 last month, also reflecting the softening of volumes,” CTS said.
“The fall in the indices is starting to reflect the downward trend but the limited decline clearly underlines the fact that the spot rates are only part of the story. The overall reality is that the continued use of long-term contracts is ensuring that rates remain high for the present.”
The continuation of the softening spot market in these circumstances would reflect those volume declines, but carriers and their customer would face an “interesting period” as they reacted to the softening market with their long-term contracts in place.
“The market is now reflecting a level of uncertainty with an increasing number of vessel cancelations and customers looking to see how best to react.”
Xeneta chief executive Patri Berglund said the fall in volumes has to be seen in the context of 2021’s record-breaking highs.
“It is worth remembering that the volumes of cargo are still far above pre-Covid levels. The port of Long Beach reported a near-record August 2022; they were only 764 teu (0.10%) short of August 2021, which was their busiest August on record.”
Total boxes volumes carried were still healthy, he said, and large-scale blank sailings are yet to be announced outside of the inbound North American service network.
“It is worth remembering there are far more box carriers carrying far more teu than ever,” he said.
Source: Lloyd’s List