High retail inventories in the United States mean little upside to Transpacific freight rates in the short term, according to a report issued by Clarksons.
The UK shipbroking group said that while Asia-Europe westbound volumes saw growth of 8% and Transpacific volumes grew a startling 18% in 2021, 2022 saw things turn, at first gradually and then more dramatically in the second half of 2022.
In the last year, east-bound Asia-Europe volumes dropped by 10% and Transpacific west-bound volumes by 7%.
Clarksons said, “The global economy was impacted by the knock-on effects of the Ukraine conflict; ensuing inflation (particular in energy prices) brought about a ‘cost of living’ crisis in many Western economies and a material ‘overhang’ in retail inventories, which weighed heavily on container volumes.”
The negative trends persisted into 2023, but statistics show an emerging divergence.
Transpacific volumes continue to struggle and remain significantly down year-on-year, showing a 22% reduction in the first four months of 2023. The Asia-Europe lane, meanwhile, has exceeded expectations, registering a year-on-year increase of 10% in March and April. Volumes reached 1.45 million TEUs in April alone, the highest since January 2022.
The Transpacific is still suffering from high US retail inventories, due to retailers’ massive stockpiling in 2020 to 2021.
On the Asia-Europe lane, despite the ongoing economic challenges, particularly inflation, volumes into Western Europe appear to have stabilised. While container traffic to key Western European economies was down 6% from March to April, but volumes to the Mediterranean and the Black Sea are seeing significant growth. Particularly, volumes to Russia rose more than 30% year-on-year in March and April, in particular, a return of China-Russia trade flows back to pre-conflict levels.
Martina Li
Asia Correspondent
