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Increasing trade imbalances squeeze container carriers

Trade on the major container routes has become increasingly imbalanced over the past seven years. This is squeezing container carriers on two fronts, writes Seaintel in an analysis.

Photo: /ritzau/AP

Global trade has become increasingly skewed in recent years. The imbalance between head-haul and back-haul on the major trade routes has grown, reveals a new SeaIntel study of the major oceangoing trade routes, where trade imbalance has increased in 14 out of 21 cases from 2011 to 2018.

This means that only every third trade route has become more balanced.

This has direct impacts for container carriers which are being squeezed on two fronts in particular, writes SeaIntel.

"Haul rates have been declining due to a combination of competitive pressure and overcapacity. At the same time they de facto need to absorb an increasing part of the round trip costs on the head haul. And as the data shows, this challenge is only getting worse," says the analyst firm.

The challenges are difficult to adjust, and carriers do not have many resources to resolve the issue.

"In reality there is not much the carriers can do about the trade imbalances. They are a consequence of the global trading patterns. Hence, the carriers have found themselves increasingly under pressure," writes SeaIntel.

The imbalance has increased on three routes in particular – those between Africa and South / Central America, on the Atlantic and across the routes between Europe and Oceania.

English Edit: Lena Rutkowski

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