Decline in Container Volume Forecast for Europe

Container lines serving the Asia-Europe run are pushing hard to sustain recent gains in freight rates ahead of the Chinese New Year. And they may do well to lock in higher prices early, because analysts Hackett Associates predict cargo volumes on the route may fall this year, with a decline of as much as 4% of total moves at ports in Northern Europe.

The latest edition of Hackett's Global Port Tracker North Europe Trade Outlook suggests that with the core E.U. economy showing “signs of remaining in the doldrums . . . at best we are facing a mild recession, at worst something more severe as capacity continues to sharply outpace demand.” With all modeled economic factors pointing to stagnation or decline, lead analyst Ben Hackett said that the company maintains a “decidedly pessimistic view of the coming six months.”

He added that “there are only a few industries still shifting sourcing and output to Asia. This leaves the volume growth to follow consumption growth . . . [and we] do not see recovery in volumes nor in freight rates.”

Despite negative predictions for this year, the last month showed improvement for lines like MSC and CSCL, which successfully issued general rate increases (GRI) in December and helped double Asia-Europe prices in one week on the Shanghai Containerized Freight Index. The December high values, over $1200 for both Northern European and Mediterranean destinations, have not been seen since 2014.

Hapag Lloyd and MOL both instituted a GRI to $1200 per TEU for all Asia-Europe and Asia-Mediterranean moves effective in January, and CMA CGM announced Monday that it is implementing a GRI in an attempt to bolster revenue.