International Maritime

Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

US demand pushes trans-Atlantic volumes to pre-pandemic levels

By Greg Knowler

A sizable increase in US demand for European exports in the first quarter boosted westbound trans-Atlantic volumes close to pre-pandemic levels , allowing spot rates to hold on to recent gains .

The 898,186 TEUs imported to the US from Europe and the Mediterranean in the first three months of 2024 were up 6.9 % year over year and down just 3.6 % from the first quarter of 2019 , according to PIERS , a sister product of the Journal of Commerce within S & P Global . After sliding

4.4 % in January , westbound shipments recovered rapidly , spiking 19.6 % and 8.4 %, respectively , in February and March , the first year-over-year growth in monthly volumes since January 2023 .

Markus Panhauser , senior vice president for ocean freight / Europe at DHL Global Forwarding , said the strong headhaul demand — with vessel utilization on the trans-Atlantic westbound near 75 % — meant “ carriers are not hunting for cargo and are rather selective .”

“ The westbound rates remain stable with slight increases , and at the same time the carrier contingency surcharges are being rolled into the rates ,” he told the Journal of Commerce , adding that DHL expected the trend of rising rates and demand to continue .

“ Carriers are not hunting for cargo and are rather selective .”

US imports from Europe spiked 19.6 % in February , the first year-overyear growth since January 2023 . Shutterstock . com

While volume increased , data from rate benchmarking platform Xeneta shows average long-term contract rates on the westbound trans-Atlantic barely shifted in the last four months . That is despite sharp increases in the spot market that took prices from $ 600 per FEU at the end of December to more than $ 2,000 in mid-April with origin and destination terminal handling charges included .

The rise in spot rates suggests a volatility that is not there , however , with most of the increase coming on Feb . 1 , when more than $ 400 per FEU was added to headhaul rates . Still , spot rates have managed to hold on to gains into April , which carriers on the trade lane greeted with some relief .

“ Surprisingly , rates have come up on the trans- Atlantic , although we don ’ t know yet whether this is a long-term development or not ,” a spokesperson from Hapag-Lloyd ’ s trade management division told the Journal of Commerce in mid-April . “[ The lower ] rates on the trans-Atlantic have not been sustainable in the last months , and with the higher demand we can see now rates are finally recovering .”

Eyes turn to US longshore labor

Various rate indices show the spot market currently sitting between $ 1,900 and $ 2,200 per FEU compared with record lows of approximately $ 1,000 or less recorded last November when the trans-Atlantic was described as a “ loss-making trade ” by carrier CEOs .

Strengthening rates have not yet found their way on to the balance sheets of carriers , if the first-quarter operational update from OOCL is anything to go by . Volume on its trans-Atlantic routes fell 2.1 %, but revenue earned on the trade lane plummeted 50 % in the first three months , the carrier announced April 12 .

Also falling is schedule reliability , with the latest data from Sea-Intelligence Maritime Analysis showing that on-time performance by carriers slid to 43.3 % in February from 44.5 % in January .

16 Journal of Commerce | May 6 , 2024 www . joc . com