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August 17 2020

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16 The Journal of Commerce | August 17 2020 International Maritime CONTAINER FREIGHT RATES from Europe to North America fell 15 per- cent between mid-June and the end of July as carriers struggled to match capacity to the lower volume being booked by cautious shippers, accord- ing to forwarders on the trade. The spot rate from Rotterdam to New York on July 23 was $2,213 per FEU, down $364 per FEU from mid-June and 7 percent year over year, after reaching a 2020 high of $2,592 per FEU on May 14, accord- ing to the Drewry World Container Index (WCI). Last year, the WCI westbound trans-Atlantic rate never exceeded $2,400 per FEU. The trans-Atlantic trade is dom- inated by automotive goods, parts, and machinery, especially on the westbound headhaul routes, with the "peak season" traditionally beginning at the end of July. However, lock- downs aimed at slowing the spread of the coronavirus disease 2019 (COVID-19) in the second quarter and rising infection rates across the US have deeply impacted US demand for imports from Europe. "The peak is definitely not com- ing, and we are hoping for a rush before Christmas, but our customers are being very cautious," Helge Neu- mann-Lezius, the Europe, Middle East, and Africa vice president of product and capacity management for DHL Global Forwarding, told The Journal of Commerce. "All production in Europe is at a low level at the moment, so vol- umes that are usually strong during the year are still down," Neumann- Lezius explained. "We are seeing some shippers have orders to replen- ish existing products, but new orders and new production is still limited. We are expecting to run with a low-volume second half of the year." The trans-Atlantic operations manager for a Germany-based forwarder, who asked not to be iden- tified, said shipment volume and shipment sizes are shrinking, with a significant increase in demand for consolidation of cargo into less- than-container-loads (LCL). "Customers are starting to come back after the coronavirus, but only with small orders," the executive told The Journal of Commerce in late July. "We are seeing 10 percent fewer orders but 50 percent less volume. For instance, before COVID-19 on one of our busiest routes from Europe to the US East Coast, we regularly had 200 consignments con- solidated in 18 FEU per week. Last week, we had 180 consignments that only loaded nine containers." Gale warning North America container imports from Europe slow as capacity tightens By Greg Knowler "We are seeing 10 percent fewer orders but 50 percent less volume." 0 1 2 3 4 5 6 7 8 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 Pre-Global Pandemic (Announced befor e Mar ch 13) Global Pandemic (Announced post-March 13) Trans-Atlantic blank sailings slow in Q3 Source: Sea-Intelligence © 2020 IHS Markit Weeks Number of blank sailings Frequency of weekly blank sailings on Europe to US trade lanes before and during the global outbreak of the coronavirus disease 2019 (COVID-19) Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

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