SIMIC

Volume from Asia to Europe in December declined 6.7 per cent compared with the same month in 2019 to 1.46 million TEU, according to data from Container Trades Statistics (CTS).

It was a sharp reversal after four straight months of annual growth on the trade that began in August. Volume growth accelerated during the traditional peak shipping season, with shipments rising 13 per cent year over year in November, a strength that took the market by surprise.

Forwarders and carriers in early January were seeing little sign of easing market conditions ahead of Chinese New Year on February 12, as the surge in online shipping kept ships full and forced retailers in Europe to restock to keep pace with demand.

On Asia-Europe, peak season demand typically eases around October before picking up again in December and January ahead of the factory shutdowns in China for the Lunar New Year holidays. This year, however, the December drop in year-over-year volume tells a different story.

In its latest Sunday Spotlight newsletter, Sea-Intelligence Maritime Analysis said the decline in December volume growth might be an indication the trade was "past the peak impact of the pandemic-induced rush of cargo."

Another sign of easing demand are spot rate levels, which remain high at $4,276 per TEU, more than triple what they were at this time last year, but have fallen slightly every week since reaching a record of $4,452 per TEU in early January, according to the Shanghai Containerised Freight Index (SCFI).

No upcoming rate increases have been announced by carriers on the trade, further suggesting carriers have lukewarm demand expectations. This is in stark contrast to the trans-Pacific, where a host of February 15 and March 1 general rate increases have been announced, reports IHS Media.