Asia-ECNA eastbound trade buoyant going into Q3, says Drewry


Port of SeattleCargo from Asia to the East Coast of North America continued to grow impressively in April and May, but freight from ECNA ports back to Asia contracted as intra-Asia trading went up, according to the latest statistics from Drewry Maritime Research.

On the eastbound lane, Asian cargo imported through North American East Coast ports grew by 10 percent between March and April, up to 317,000 TEUs (20-foot-equivalent units).

Eastern cargo further grew 13.1 percent between April and May, taking the total up to 358,000 TEUs, much of which was seasonal due to importers making the normal transition from winter to summer, said Drewry.

May’s estimated Asian cargo imported through ECNA ports took the total for the first five months of the year up to 1.6 million TEUs, 8.7 percent more than during the same period of 2013.

Asian cargo imported through all North American ports during April and May was 6.1 percent higher than during the same period of 2013, but year-over-year growth in the first quarter was just 5.3 percent, so there was a small surge of sorts in the last two months.

Ocean carriers reacted to the cargo growth by increasing vessel capacity between April and May by 6 percent, followed by a further 1 percent in May.

This was achieved through the G6 alliance separating its SCE/NYE service back into two separate loops, as it was before the onset of the winter season in October. The alliance’s eight weekly services now provide 35 percent of all eastbound vessel capacity.

Also, the CKYH alliance and Evergreen introduced their new AWE8/NUE4 service via Suez as planned. The additional capacity provided by 11 vessels averaging 8,200 TEUs was, however, partially offset by the merger of Evergreen’s NUE and AUE services via the Panama Canal.

Other schedule changes included the cancellation of one sailing in May, followed by none in June, compared to four in April. There was also continued modification of port pairs and slot swap arrangements. All of these resulted in average vessel size for the whole trade increasing from 5,600 TEUs in April to 5,750 TEUs in May, and then on to 5,800 TEUs in June.

As cargo growth exceeded vessel capacity growth, average vessel utilization increased from 73 percent in March to 83 percent in April, and probably to over 90 percent in May, which helped stabilize freight rates. According to industry feedback, some vessels were even full in June, said Drewry.

Looking ahead, the UK-based think tank expects no further major schedule changes on the horizon, although it is not discounting the possibility that Maersk, Mediterranean Shipping Co., and CMA CGM may press on with some form of consortia arrangement after the rejection of P3 by China’s competition regulator.

Westbound, containerized cargo from ECNA ports back to Asia fell from a monthly average of 181,000 TEUs in the first quarter to 176,000 TEUs in April, underlining U.S. exporters’ continuing difficulty in capturing a greater share of the Chinese market. “Asian countries still prefer to trade with each other—although their cargo mix is very different,” noted Drewry.

April cargo brought the total for the first four months of the year to 717,000 TEUs, just 1 percent more than during the same period of 2013, and, there is little seasonality at present.

The fall in cargo, combined with an increase in capacity, pushed average westbound vessel utilization down from 63 percent in March to 59 percent in April, “which maintained pressure on freight rates,” Drewry said.

It forecasts that eastbound vessels will remain well utilized during most of the third quarter, so that sailing cancellations will be minimal.

Photo: SounderBruce