Drewry’s WCI Asia-North Europe index recorded a 10% increase in the spot rate reading from pre-Christmas levels yet, export demand to North Europe ahead of the Chinese Lunar New Year (CNY) remains dampened and that is expected to continue post-holiday.
Lars Jensen, CEO of Vespucci Maritime says the rate spike on the tradelane needed to be put into perspective, noting that the reading is 19% below pre-pandemic levels recorded in January 2020.
“As we move into 2023, it is clear that container market conditions will be drastically different from 2022,” he said.
According to Jensen’s analysis in the latest Baltic Exchange FBX report, demand is currently subdued because of an inventory oversupply.
He says the possibility of a demand surge once the inventory overcorrection happens would “largely depend on the depth and duration of the current economic downturn”.
“At best, such a surge might happen in peak season 2023; at worst, it might be postponed until early 2024 in the lead up to the lunar new year,” Jensen postulates.
Overall, carriers are more optimistic about demand recovery prospects on the Trans-Pacific than on the Asia-Europe trades, but how the market will behave post-CNY remains unclear.
Meanwhile, demand on the Trans-Atlantic Westbound trade has been buoyant, with U.S. consumers gravitating toward goods from Europe than from Asia.
Source: The Loadstar