Drewry: East-West Trade Shifts Momentum


Demand momentum shifted from the northbound to southbound leg of the Europe-East Coast South America trade in the fourth-quarter 2016, but with little capacity movement spot rates are unlikely to change much, according to Drewry’s Container Insight Weekly.

Drewry reported that container shipments from Europe to East Coast South America finished last year on “something of a high” with year-on-year fourth-quarter growth of 14%, the first time the trade has seen a positive quarterly rate since the first three months of 2014.

For the full-year 2016 Europe to ECSA container demand fell by 3.6% to 760,000 TEU, according to Datamar statistics.

In 2013 the annual volume for the trade was over 900,000 TEU. Last year’s decline was less pronounced out of North Europe, which slipped back 2%, whereas volumes out of the Mediterranean fell by 7%.

For the second year running the more reefer-heavy northbound leg carried marginally more boxes than southbound voyages with an annual total of 830,000 TEU.


Drewry said this represents an increase of 2% over 2015, but in contrast to the southbound market some of the momentum appears to be waning.

Northbound volumes declined by 6.6% in the fourth quarter, which was the first negative performance since 1Q15.

Drewry viewed this as suggesting that “the strengthening Brazilian currency is promoting imports, but harming exports”.

It concluded: “The direction of travel for spot rates on this trade will be influenced most by the prevailing trend for demand as carriers appear unwilling to many any capacity adjustments.

“Therefore, look for a slight increase in southbound rates at the expense of northbound pricing in the coming months.”

Neil Davidson, Senior Analyst of Ports and Terminals with Drewry Maritime Research will be a speaker for PTI’s upcoming Terminal Automation & Training C-Level Networking Conference taking place April, 19-20, 2017, London.

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