In September, some 13.7 million twenty-foot equivalent units (TEUs) were shipped globally, bringing the full-year total up to 125.2 million TEUs, an improvement of 4% for both the month (year-on-year) and year-to-date. But the Baltic and International Maritime Council (Bimco) says the growth rate has been slowing for the past six months.
Solid growth was seen on the Far East to Europe trade lane during the peak season, it said. Volumes reached an all-time high in Q3, growing 6% higher than in Q2 of 2018, and 2.5% more than in Q3 of 2017. For volumes being shipped year-to-date, demand nevertheless remains very low, growing by just 1.7%.
The other significant long-haul and high-volume trade lane, from the Far East to North America, was much stronger, growing 7% from Q2 this year and 4.8% from the third quarter of 2017.
The impact of the trade war is reflected in the latest container shipping data, noted Bimco. Global demand is down from Q2 to Q3 in 2018 by 1.5%. Notably, both European and North American export volumes decreased from the second quarter to the third.
In the largest market in volume terms, intra-Asian volumes were down by 3.8% in Q3 from Q2 but remain up by 4.6% for the year-to-date.
While spot freight rates out of Shanghai to the U.S. East Coast (USEC) and U.S. West Coast (USWC) have clearly improved in the third quarter, the full year has been quite solid too—up 6.4% and 8.4%, respectively. The China Containerized Freight Index measurement tells a similar story, with USEC up by 1.3% and USWC by 2.8%.
For spot rates on the Far East to Europe trade lane though, it has been a “loss-making and worse level year to date in 2018,” said Bimco. On average, a TEU was being transported halfway across the globe on an ultra-large containership for just US$825; at the same time last year, it was $898 per TEU.
On September 24, a further 22.4 million tonnes of seaborne containerized goods were impacted as the U.S. implemented tariffs on a $200 billion list of goods; that amounted to a further 2.24 million TEUs. In total, 3.6 million TEUs (10 tonnes/TEU global average) are now officially affected by the trade war, reported Bimco.
The report said that with the trade war, U.S. importers are said to be paying 50% more in tariffs in September compared with the same month last year. Two-thirds of the increase comes from containerized goods. In China—where predominantly dry bulk goods are targeted—imports of many commodities have been dramatically reduced. This also goes for the 7.1 million tonnes of imported containerized goods that have been hit by tariffs on Chinese imports.
A positive development, meanwhile, is the agreement made December 1, 2018 between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, to hold a temporary truce in the trade clash between the two countries. The U.S. government will now hold off on raising tariffs on $200 billion worth of Chinese goods from 10% to 25% on January 1, according to a White House statement.
In exchange, China said it was willing to purchase a “very substantial” amount of agriculture, energy and other goods from the United States to help reduce the trade imbalance.
Photo: Captain Albert E. Theberge
