Europe/Far East trade ‑ Still a Driver for Growth!

Europe/Far East trade – Still a Driver for Growth! Container shipping has enjoyed a steep rate of growth over recent years, and this was at first completely unexpected. The underlying cause is to be found in the rapid business developments in China, consequences of which were largely underestimated. But what does the future hold in sto- re for the Europe/Far East trade? An analysis by Dr. Burkhard Lemper Dr Burkhard Lemper from the Institute of Shipping Economics and Logistics (ISL), Bremen. The heady growth in Chinese exports, which were containerized to a large de­ 2.000 200 gree, generated a strong demand for ship 1.800 180 capacities, especially in the outgoing Deutscher Seefrachtenindex 1995 =100 traffic from Asia. However, the transport­ 160 1.600 ation capacity in the other direction was 140 Quelle: ISL auf Basis Containerisation International und Statistisches Bundesamt 2006 also utilized, owing to the necessary re­ 1.400 turn transport of the empty containers, 120 US$/TEU despite the comparatively low numbers 1.200 of full units under way. However, the 100 freight rates reflected the strong imbal­ 1.000 80 ance in respect of paying cargo loads. Whereas at certain times there was 800 60 hardly enough capacity available in the 600 direction from Asia to Europe and the 40 shipping rates were correspondingly high, 400 20 there was a chronic lack of paying cargo in the other direction and the rates were 200 0 much lower. 00 04 06 02 03 05 9 6 01 8 5 7 9 9 9 9 9 20 20 20 20 20 20 20 19 19 19 19 19 I. I. I. I. I. I. I. I. I. I. I. I. Reason for Strong Declines in Rates Fernost/Europa (WB) Europa /Fernost (EB) Dt. Seefrachtenindex Asien Not Clear In the past few months, a certain relaxa­ The development of freight rates (indices) in Europe/Far East trade tion has been noted for the freight rates, at least from the viewpoint of the ship­ somewhat by the end of 2005 and also a result, there is at least an improved pers. In particular, drops have been re­ in the course of 2006 thus far, so that outlook for a more uniformly distribut­ ported in the shipping rates from Asia to the excess supply has turned out to be ed load on the ships in the Far East Europe. In some cases, reductions of 40 distinctly smaller than had been expect­ trade. percent were mentioned, but these mag­ ed as recently as the end of last year. nitudes are difficult to confirm on the Early on in 2006, the ships coming from Data of  Container Ports Analysed basis of the published indicators. Asia were certainly still fully laden. This was confirmed by an examination The reasons for such a slump are also In all probability, the Chinese of the transhipment volumes for the far from clear. It is evident that, in the economic growth in 2006 will again lie Chinese ports and all the Asian ports. For course of this year and also next year, an considerably above nine percent, and several years now, ISL has been tracking a appreciable volume of new ship capaci­ will possibly extend into double digits.