Global container traffic soared to new heights in May, with Container Trade Statistics (CTS) reporting a record-breaking month. This surge was primarily driven by a substantial increase in intra-Asia trade, which experienced a year-on-year growth of 14.4%, totalling over 4.5 million TEU.
Other significant contributors to this growth included the Far East-North America trade, which saw a 5.9% year-on-year rise to just over 2 million TEU, and the Far East-Europe trade, which grew by 2.9% year-on-year, reaching slightly over 1.5 million TEU. These volume increases are now being reflected in the CTS price index, which covers both spot and contract rates, with a noticeable rise in rates for transpacific and Asia-Europe trades.
The CTS price index for the Far East-North America route increased by 12.6% year-on-year, while the Far East-Europe route saw a 15.3% rise. This trend likely reflects the impact of annual contracts negotiated this year between carriers and major shippers. Traditionally, the US contract season runs from May 1 to April 30, but European shippers are beginning to adjust their timelines, with many now running contracts from April to the end of March. A UK-based forwarder noted that retailers like Primark have adopted this new contract period, influenced by carriers’ reluctance to renew contracts during periods of low spot rates.
Hapag-Lloyd CEO Rolf Habben Jansen addressed this issue in November, stating, “We see expectation out there for contract rates that are unrealistic, and at those levels we will not close, because we’re not going to close contract rates at levels where we, for sure, will lose a lot of money.”
Geopolitical factors, such as the Houthi attacks on Red Sea shipping, have further complicated the situation, leading to vessel diversions and shifts in trade patterns. Despite these challenges, the CTS report for May also highlighted increased activity in secondary trades due to rising demand and prices.
The Far East-Middle East/India trade, now the fifth-largest trade route globally, grew by 5.3% in May, reaching 750,000 TEU, with a price index increase of 16.2% driven by congestion and equipment shortages. The Far East-Latin America trade experienced a remarkable 19.8% growth in volume, with prices soaring 40.3% year-on-year. Additionally, the Far East-Southern Africa route saw a 34.3% increase in prices despite a modest volume growth of 1.2%.
Emphasising Real-Time Supply Chain Visibility
These dynamic shifts in global container traffic highlight the critical importance of real-time supply chain visibility. Implementing advanced supply chain visibility software is essential for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make strategic, data-driven decisions. By providing accurate and timely data, these tools help stakeholders mitigate the impacts on their supply chains, navigate disruptions, and optimise logistics strategies effectively.
The new data underscores the ever-evolving nature of global trade and the necessity for robust, responsive supply chain management solutions. Leveraging real-time insights will be crucial for maintaining resilience and competitiveness in the global market.