ELAA data confirms shrinking cargo volumes

Janet Porter - Monday 9 February 2009

CONTAINER lines’ own statistics show the full extent of the collapse in cargo volumes late last year as economic confidence evaporated. 

The first set of figures published by the European Liner Affairs Association provides a stark illustration of the depth of the downturn, with westbound volumes from Asia to Europe plummeting 12% between October and November to 831,778 teu. 

The combined figure of 1.78m teu indicates that 2008 is on course for a huge drop in shipments compared with the 2007 figure of around 14m teu teu. 

Although there is always a dip between October and November liftings as the pre-Christmas spike comes to an end, the 2008 fall was much bigger than normal, said Rod Riseborough, chief executive of Container Trade Statistics, a subsidiary of ELAA . 

The association’s numbers for Asia-Europe volumes, compiled from member lines, represent an estimated 88% of the total trade. That is considerably higher than the 70% market share of Far Eastern Freight Conference lines. 

The FEFC was wound up last October when conferences were outlawed in Europe. The ELAA then took on a new role as industry trade association, with a brief to compile data for the container trades serving Europe. 

Seven routes are being covered initially. 

Europe-Asia liftings also suffered a steep fall between October and November to 290,206 teu, a month-on-month decline of 16%. Comparable figures for 2007 are not available yet as the FEFC’s data was less comprehensive. 

However, the ELAA hopes to be able to publish year-on-year statistics in March. 

Provisional data suggests that Asia-Europe volumes were down by 5% in October compared with 12 months earlier, but plunged 15% between November 2007 and 2008. 

The picture of contraction is the same on other trade routes, with westbound Atlantic volumes falling 15% between October and November to 214,827 teu, and eastbound liftings down by 12% to 194.239 teu. 

The ELAA figures account for nearly three-quarters of total North Atlantic trade. 

Most major carriers are members of the ELAA, with the exception of Japan’s MOL and Atlantic Container Line. 

MOL, which resigned from the association last year and also from the Transpacific Stabilization Agreement, has announced a rate restoration programme. The line said it would be seeking to increase in Asia to Europe rates by $300 per teu on April 1, followed by another hike of the same amount on June 1, and a third rise on August 1. 

In the other direction, MOL will be pressing for $200 per teu increases on April 1 and September 1. 

“While increased freight rates are never very popular, the current downtrend is completely unsustainable and MOL is confident customers will recognise the need to maintain stability and viability in their supply chain operations over the long-term,” the line said. 

The bid to restore rates coincides with industry reports that container shipments into the US are expected to drop by around 12% in the first half of the year as the consumer spending downturn forces retailers to cut stocks which, in turn, will lead to lower factory orders. 

The ELAA data suggests that conditions in the trades between Europe and the Middle East/subcontinent are in even worse shape, with westbound volumes contracting by almost a third to 78,351 teu between October and November, and volumes down 37% in the other direction. 

This trade was already under severe pressure, with westbound volumes declining by about 12% in the first eight months of last year after also contracting in 2007. 

Rockbottom freight rates are also spreading, with trade sources saying that some lines are quoting an all-in rate of $250 for shipments from China to Dubai. That compares with about $1,000 per teu three or four months earlier.
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