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Drewry: North Europe-America spot rates to remain stable


London, UK — In the first five months of this year, North European exports to North America registered a rise of 5.7%, according to statistics from PIERS and CTS, shipping consultancy Drewry said in its Container Insight report.

Loads bound for the US rose 4.9% to 890,000 TEU; Canadian imports were flat at roughly 260,000 TEU, while inbound Mexican volumes continued to soar, rising by nearly 20% to just under 180,000 TEU.

Some carriers are hopeful that this current rate of growth will continue throughout the year, but Drewry is more skeptical.

“In our opinion westbound Transatlantic volumes are likely to soften in the second half of the year and the annual growth rate will probably end up closer to 3%. The key factors that have brought us to this conclusion are the Brexit effect and a slowdown in new car sales in the US,” Drewry said.

If there is a growth story in the coming months, then it will be the flow of components that are being despatched to the numerous suppliers that have sprung up in Mexico to support the new breed of car assembly plants in the country, Drewry pointed out.

The return leg of the trade has been pretty much static, which is where it landed last year. Were it not for greater exports out of the diminutive Mexican market, eastbound volumes would have been in decline after four months of the year.

US exports were down by 0.5% year-to-date to 457,000 TEU, Canadian exports fell by a similar margin to 154,000 TEU, while Mexican shipments jumped 9% to 113,000 TEU thanks in the most part to enhanced movements of car parts and beer. Subsequently, total North American exports to North Europe were up by 0.8% after four months to 724,000 TEU.

According to Drewry, there seem to be no drivers that might generate any meaningful growth in the eastbound trade, either now or in the foreseeable future. The dollar remains strong and American exporters are focusing on new markets in the Far East.

“Further ahead, we expect to see more upgrading via the cascade; replacements including two MSC ships (8,089 TEU) in place of 7,400 TEU ships on 2M’s TA3/NEUATL3 loop, two 7,450 TEU ships in place of 6,600 TEU ships on 2M’s TA2/NEUATL2 loop and one 6,500 TEU in place of one 4,200 TEU on Ocean Alliance’s Victory Bridge/EUG/ATG1 service,” Drewry added.

Drewry concluded the report by stating it “believes that westbound demand growth will probably taper off as the year progresses, but even so spot rates will continue to be relatively stable.”

 


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