Drewry reported a total of 422,000 20-foot containers were moved from Asia to the Mediterranean in March. April TEUs rose slightly to 427,000, but May’s totals rose nearly 7 percent month over month to 458,000 TEUs. June totals have not been finalized, but Drewry anticipates a small slowdown in cargo numbers.
May’s jump, however, brought the lane’s cargo volume to one million TEUs, 7 percent higher than the same period of 2013. Growth to the Western Mediterranean was 8.6 percent, compared to the Eastern Mediterranean’s 5.7 percent, Drewry said in the latest edition of its Container Insight Weekly.
“The pace of change was well ahead of normal seasonal cargo growth, as well as economic growth, suggesting that even better times lie ahead,” Drewry said.
The phenomenon, however, may also be a flash in the pan. Drewry said there’s a chance that after five years of difficult economic conditions, belts have loosened just enough to replace the essentials. Consumers could be replacing cars or appliances, in which case the cargo numbers to the Mediterranean won’t hold.
The SCFI rate to the Mediterranean stood at $1,459 per 20-foot container as of July 25.Capacity also has tightened on the lane. The CKYHE alliance reduced its capacity by 16 percent by streamlining sailings, which resulted in a 3 percent capacity reduction from April to May for the lane as a whole, Drewry said. However, the average vessel size increased from 8,100 TEUs in April to 8,530 TEUs in May and June.
In theory, that means utilization rates could have been over 100 percent, Drewry said, but carriers seem to have battled the problem with unscheduled sailings. The capacity issue, however, is shown in the pricing for cargo running from Asia to the Mediterranean.
Overall, spot rates on the Shanghai Containerized Freight Index from Asia to the Mediterranean have been up substantially, rising from a low in mid-March. Despite some erosion in recent weeks, the spot rate stood at $1,459 per 20-foot container as of July 25, up 63 percent from the low for the year of $893 on March 21.
Shippers may have been cautious to add capacity with the P3 Network set to begin sailing in the early third quarter. Now, with the rejection of the alliance by Chinese regulators and a new try by Maersk Line and Mediterranean Shipping Co. in the form of the proposed 2M vessel-sharing agreement, which won’t begin offering service in the Mediterranean until after the new year, interesting times could lie ahead, Drewry said.
