Track and Quotes

Show Shipment Information - Track and Trace PackageTrack and Trace
Get a Shipping Rate QuoteRate Quote

Demand soars Europe-Asia
Monday, 19 October 2009 00:00
Recyclables and growing China market driving volumes up

Forwarders and shipping lines have reported strong volume increases on the eastbound Europe-Asia trade over the past few months, while westbound demand has also increased.

The latest figures from the European Liner Affairs Association (ELAA) show volumes on services from Europe to Asia increased 10% year-on-year in August, to just under 470,000teu.

It is only the second volume increase and the first double-digit volume increase on the eastbound trade reported by the ELAA this year.

Kuehne + Nagel north-west Europe CEO Tim Scharwath said: "We have seen growth in the secondary recyclable materials sector—waste paper, metal scrap, plastic scrap—which is the driving the volumes to Asia.

"However, those volumes are very volatile. You may have an increase one month, but they can quite easily go down the next, because companies that trade with recyclable materials always ship to where they can get the best price."

Ian Connell, director of UK forwarder Energy Freight, added: "At the moment we’re doing more business on the eastbound trade than we have in recent times, which is fantastic news.

"As a result, shipping lines are successfully increasing rates, and that is not actually a bad thing for forwarders because when rates are low, forwarders’ margins are low."

CMA CGM senior VP for Asia Europe Nicolas Sartini told IFW the increased eastbound demand had started in May, and he was confident it would continue for the coming months.

"It is caused mainly by the continuous growth of the Chinese market," said Sartini. "[It is also] important to mention that carriers are still carrying important volumes of waste commodities."

Sartini was unsure whether the increased eastbound volumes were an indicator that westbound volumes would soon start to grow.

"It would be nice, but it is not 100% sure.

"A growing share of these eastbound volumes is used for the internal [Asian] market-consumption and investment.

"[But], we notice that some Chinese industries, which are foreign trade-oriented, are increasing their inbound volumes and their inventories to be in a position to serve more orders."

Taiwanese carrier Evergreen said it had also experienced stronger than expected demand for October and November as a result of companies replenishing stock, and the wider economic recovery.

This, combined with carriers reducing capacity levels, had resulted in "limited availability" of space.

Scharwath added that demand on the westbound Asia-Europe trade had also increased.

He said this was down to European companies restocking warehouses and trying to save transport costs in light of continuously increasing ocean freight rates.

ELAA figures show that in August westbound monthly volumes surpassed the 1m teu mark in August for only the second time this year. However, volumes were still 11% down year-on-year.

International Freighting Weekly, 10/19/2009