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July 3, 2023

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16 Journal of Commerce | J uly 3, 2023 International Maritime Markus Panhauser, senior vice president for ocean freight/Europe at DHL Global Forwarding, agreed the market was showing signs of a recovery with the service provider's May volumes at last year's level. "Feedback from the industry is that the stock levels of the retailers are melting and customers have started the replenishment," he said, adding that the inventory overhang was leading to products being heav- ily discounted, and consumers were taking advantage. Abundance of capacity Peter Sand, chief analyst at rate benchmarking platform Xeneta, said the difference between freight rates and volume on Asia to North Europe in April 2022 compared to this year was striking. Xeneta data shows Asia-North Europe rates in April last year started the month at $14,400 per TEU and ended at about $13,000/TEU. Despite volume this April rising 2.4% year over year, rates through the month were about $2,500/TEU. An abundance of capacity caused by the easing of port congestion in Europe, new ship deliveries and improving carrier schedule reliabil- ity were keeping a lid on rate levels despite the volume increase, Sand noted. "It is positive to see that that European demand is recovering, and while liner operators are no longer cutting speed on the main trade, they are still deploying more ships, so capacity is there," he said. Asia to Europe, with the trend con- tinuing in May," Mario Cavallucci, vice president of Europe operations at AIT Worldwide Logistics, told the Journal of Commerce. "The company anticipates that container counts from Asia to Europe will normalize for the remainder of 2023, including a peak season in Q3 driven by decelerating inflation and lower inventories," Cavallucci added. 'Melting' inventories Even though the percentage increase in imports to North Europe, which accounts for 60% of all Asia-Europe trade, was in the low single digits, that monthly volume was rising on a year-over-year basis left Hapag-Lloyd CEO Rolf Habben Jansen in an optimistic mood. "We see that 2023 is starting to approach last year's volume, and I think May and June will not be that weak," Habben Jansen told during a press briefing in early June. "With a normal peak season, we are going to see a recovery in the second half of the year." CONTAINER VOLUMES ON the Asia-Eu- rope trade jumped more than 11% in April, driven by large increases in demand that continued across the east and west Mediterranean lanes for a second consecutive month, according to the latest data from Container Trades Statistics (CTS). A total of 1.44 million TEUs were shipped westbound in April, with the North Europe share rising 2.4% year over year to 882,000 TEUs. But it was, once again, on the Mediter- ranean trade lanes where the most significant increases were reported. Containerized imports to the East Mediterranean and Black Sea jumped 38.5% year over year to 296,218 TEUs in April, while West Mediterranean volume rose 21.7% at 267,537 TEUs. That follows an 8% increase in Asia-West Med volume and a 39% increase in East Med imports in March. "It is remarkable that the January -to-April volume from Asia to North Europe and the Mediter- ranean combined is down just 1.3% compared to the same four months last year, when the Asia-Europe trade was performing strongly," CTS CEO Nigel Pusey told the Jour- nal of Commerce. Carriers and forwarders are also reporting modest increases in May bookings from European importers, attributed to companies replen- ishing inventory after months of destocking. They are reading the numbers as confirmation that the green shoots of demand are emerg- ing on Asia-Europe, with growing expectations of an actual peak sea- son in the third quarter. "April was a tipping point for AIT's ocean import volumes from 'Remarkable' recuperation Second month of big Asia-Med volume growth drives market optimism By Greg Knowler "The stock levels of the retailers are melting, and customers have started the replenishment." Asia–Europe volumes snap 13-month YOY decline in March Containerized imports to North Europe from Asia, with year-over-year change TEU volume 1,000,000 0 200,000 400,000 600,000 800,000 1,000,000 -40% 0% 100% 50% -50% Year-over-year % change L Jan 2021 Jul Jan 2022 Jul Jan 2023 TEUs Year-over-year % change Aug, 2021 Jul 1,170,000 150% TEU: TEU: T 0k 0k 926.0 926 0 Year-over-year % change: Year-over-year % change: -5.7% -5 Source: Container Trades Statistics © 2023 S&P Global Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

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