Container trade is expected to grow at a slower rate in 2015 than in the previous year.
Relatively soft European demand, the slowdown in Chinese economic activity and weaker commodity prices are all understood to be factors behind this trend.
However, some trades have still grown robustly this year. The performance of Asian exports this year neatly illustrates this very mixed demand side picture.
Asian exports to Europe, North America, the Middle East/ISC region, and on the North-South trades (Latin America, Africa, Oceania) are expected to account for 52m TEU in 2015, 29% of global trade.
Asian exports are even higher when taking into account the vast intra-Asian trades which are expected to total 50m TEU this year. So box trade generated by exports from Asia, the chief engine of which is China, is clearly very significant.
Global Growth Cut 1%
Far East-Europe trade volumes have experienced a dramatic trend in 2015. The change in direction on the peak leg trade from growth of 7% in 2014 to expected contraction of 3% in full year 2015 is estimated to have cut around 1% from global box trade growth this year. European demand appears to have been muted as a result of an economically challenged Eurozone, a collapse in Russian imports as well as a response to excess inventory build-ups in 2014. Meanwhile, whilst Asian box exports to Southern Hemisphere regions are expected to show growth this year, they are only projected to expand by a modest 4%. This is understood to have been the result of continued economic challenges in Latin America, and the impact of slower Chinese demand and lower commodity prices on developing economies.
We Still Want Your Boxes
Nevertheless, demand growth for Asian exports in North America, where US economic expansion has been robust this year, has been strong in 2015 so far. Box trade on this route is projected to rise 7% this year to 15.8m TEU.
Asian exports to the ME/ISC region appear to have grown strongly this year so far, with Indian economic activity estimated to be robust. Box trade on this route is expected to rise 7% in 2015. Overall, Asian exports to these four listed regions are expected to grow 3.5% this year, from 7.1% in 2014.
Problems Closer To Home
In addition, the estimated slowdown in intra-Asia container trade is another key part of the story of slower container trade growth. Softer Chinese demand and economic trends elsewhere in Asia are thought to have slowed trade growth on the intra-Asian routes this year. Box volumes on the network are expected to grow 4.3% in full year 2015, some way below the 2014 estimated rate of 6.1%.
A Mixed Year
So the mixed performance of Asian box exports reflects the key trends in global box trade this year. Even if volume growth is still expected to outstrip expansion in many other shipping sectors, and 2016 is projected to see an improved rate of growth, current demand side trends clearly illustrate the headwinds facing the containership sector.