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Home | Internacional | Trade war still denting confidence on transpacific trade
Postado em 30 de outubro de 2019 | 17:15

Trade war still denting confidence on transpacific trade

A slowdown in volumes on the key Asia-US trade lane has seen carriers slash capacity to raise load factors. But freight rates remain at just half of where they were last year.

Container trades between Asia and the west coast of North America are still struggling to ward off the impact of the trade war between China and the US, according to Drewry.

Despite providing a welcome boost for carriers last year, as front-loading ahead of the imposition of tariffs lifted volumes, the artificial stimulation of shipments has since regressed, the analyst said.

“After eight months, loaded traffic from Asia to the west coast of North America, covering the US, Canada and Mexico, had shrunk by nearly 3%,” it said. “The slack was at least picked up by the smaller Asia to North America east coast route, which increased by almost 6% to produce a flat total net result for the year-to-date period.”

Recent US-only data confirmed the trend, Drewry noted, with west coast volumes falling 5.8% compared with 6.9% growth at east and Gulf coast ports.

But the “extraordinary environment” in which carriers on the transpacific were operating made it difficult to evaluate actual trading performance this year, it said, adding that it expected growth to return in the “not too distant future”.

“The transpacific has thus far managed to avoid significant contraction thanks to a combination of factors, including a weakening of the Chinese currency, willingness from some Chinese exporters and American importers to absorb some of the additional costs arising from the new tariffs and some trade substitution within Asia,” said Drewry.

But ultimately, it was the strength of the US economy that would serve to drive growth again.

“The underlying strength of the US economy that hasn’t been derailed by the Washington and Beijing shenanigans and has continued to create jobs and raise incomes throughout,” the analyst said.

Nevertheless, this year’s peak season had failed to deliver for carriers, with data indicating a 1% decline in volumes from Asia to the US west coast in the third quarter.

Carrier efforts to ameliorate the slowdown by blanking sailings and withdrawing tonnage helped keep load factors up, but these “artificial supply manoeuvres” were not enough to raise spot freight rates, which have been stuck at around $1,500 per feu, according to Drewry.

Last week’s Shanghai to Los Angeles World Container Index was down by 47% on the same week last year, it added.

“The immediate outlook for the transpacific is heavily tied to the trade war, which is currently in one of its more peaceful settings but is still liable to sour at any moment,” Drewry said. “Assuming carriers refrain from returning too much capacity, there is a reasonable hope for higher freight rates as we approach Black Friday and Christmas sales.”

 

Source: Lloyd’s


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