Transatlantic load factors unmoved

Available slot space on services traversing the North America-Europe trade lane anticipated to be on a par with last year during the second quarter, as a tightening in eastbound utilisation offsets a fall in westbound load factors

Transatlantic trade lane utilisation in the second quarter of 2018 held at a similarly level to that in 2017, but fell by about one percentage point compared with the first quarter.

Analysing load factors in either direction, we forecast that while eastbound services saw an improvement of three percentage points -up from 62% to 65% between the second quarter of 2017 and the same quarter this year -in the opposite direction there was a decline of approximately four percentage points (down from 83% to 79% during the same period).

On a quarter-to-quarter comparison, a one percentage point drop in load factors is estimated on the overall transatlantic trade lane owing to the fall in utilised slot space onthe westbound route, down from 81% in the first quarter of 2018 to 79% in the second.

Based on the latest trade data available at the time of this analysis, and analysing the major country pairs within this trade lane, double-digit growth in the volume of containers moved from the US to the Netherlands, Italy and France, is forecast, increasing by about 12%, 11% and 18% respectively against the second quarter of 2017.

The anticipated increase in eastbound transatlantic load factors during the second quarter comes off the back of an estimated 3% jump in demand, as capacity was cut by around 2% against the corresponding period of last year.

Looking at the commodities, on a Standard International Trade Classification five-digit level, one of the key drivers of US exports to the Netherlands were 'mixtures of urea and ammonium nitrate', up by more than 30%.

'Kraft liner' was a major contributor of growth in the US-Italy market, rising 5% over the past year, while a 23% jump in 'Non-specified appliances' allowed for the double-digit jump on the US­ France trade.

In the opposite direction, or westbound, it is estimated that demand grew at a slower rate than supply during the second quarter, driving down ship utilisation ifcompared to last year.

A 7% increase in capacity is forecast, outstripping demand growth of 2%. Latest trade data suggests volumes moved

between Germany and the US increased by 5% in the second quarter compared with the year-ago period. In terms of commodities, a big contributor to this uptick in trade was a 20% increase in 'photographic plates and film'.

During the same period, exports from Turkey to the US are also expected to have seen a significant increase in demand, rising in the region of 10%. 'Carpets and other textile floor coverings', up by circa 40%, played a significant role in the volume surge.

Transpacific capacity changes (Q2 2018)

•Ocean Alliance - Independence/TAX4/ATE2: Service started in April between Northwest Europe and the US East Coast, deploying five vessels with an average 5,000 teu capacity. The service was terminated at the start of July.

• Maersk Line - Colombia Express: Connecting Northwest Europe with Colombia, the service was extended in late 2017 to calt at the US East Coast ports of Charleston and New York. The weekly loop deploys six 2,500 teu vessels.

• Hapag-Lloyd - MGX: Operating between the west Mediterranean and the US Gulf Coast, the German carrier's offering has increased deployed capacity by 30% with the addition of seven larger units averaging 5,400 teu. These new ships replace the former 4,100 teu capacity ships serving the route.

• The Ocean Alliance - Victory/ATG 1/EAG/EUG: Capacity on the loop, trading between Northern Europe and the US East & Gulf Coast, has been cut by 11% in the past year.The service still operates with six ships, but smaller ships havebeen deployed to reduce available slot space from 324,000 teu to 287,000 teu.