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Issue #592

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2014 Media Kit

Trans-Pacific ships fill up after lunar new year lull

By: | at 08:00 PM | Liner Shipping  

In a further step to provide the shipping community with greater insight into the dynamics in the transpacific trade lane, the Transpacific Stabilization Agreement (TSA) has initiated release of trade utilization data, the first installment of which covers first quarter 2007. This data will be updated periodically along with views of how the peak season and balance of the year are progressing.

A review of early 2007 activity in the trade shows that Asia-US cargo demand has rebounded on all major route segments following the week-long Lunar New Year holidays in Asia. After a two-week lull during the first half of March container ship utilization has climbed to more than 90% on most sailings.

On the two most heavily used corridors ’ local and intermodal cargo arriving at California ports, and freight moving by water to the East Coast via the Panama Canal ’ utilization was 91% and 94% respectively, at the end of March 2007. During much of February, prior to the Lunar New Year factory closures in Asia, vessel utilization held steady in the 95-100% range.

In summary, recent developments in the trade have better aligned capacity with demand, resulting in very healthy utilization levels for the traditional ‘slack season’ in the early part of the year.

Current cargo trends, and forward bookings received to date by TSA carriers, indicate an increase in container traffic through April. A brief lull is anticipated in early May due to national holidays in China and Japan, after which shipping lines are preparing for another record peak season, which will require the additional capacity coming into the trade to adequately serve the market demand.

TSA Chairman Ronald D. Widdows indicated that cargo demand and utilization are strong and, in spite of some mixed views regarding the US economy, largely consistent with recent economic data trends in the US Among the positive indicators have been 4.4% unemployment, rising wages, inflation below 3%, steadily rising household disposable incomes and consumer spending, and strong retail sales in apparel, toys, home and garden supplies, health care products, business equipment and other categories.

Despite slower US GDP growth in first quarter 2007, Widdows noted, a continuing shift in manufacturing investment and production offshore has intensified the flow of manufactured imports across the Pacific. ‘Even as overall US economic growth is moderating, increased trade volumes due to the amount of goods produced in Asia continue to drive cargo growth in 2007,’ Widdows said. TSA carriers are forecasting 9-10% Asia-US cargo growth for 2007, and slightly higher growth during 2008.